gpb holdings iii, lp

Memorandum #______________

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

$1,500,000,000

Class B-1 Limited Partnership Units

GPB HOLDINGS III, LP January 2018

Due Diligence Use Only - Not for Distribution

0118 DD Only

CERTAIN NOTICES This Confidential Private Placement Memorandum (this “Memorandum”), of the Company (defined below), is being furnished on a confidential basis and is intended solely for the use of the recipient in connection with this offering. Each recipient, by accepting delivery of this Memorandum agrees not to copy or divulge the contents hereof to any person other than a legal, business, investment or tax advisor under the same duty of confidentiality and only in connection with obtaining the advice of any such persons with respect to this offering and not to reproduce or redistribute this Memorandum in whole or in part. The Memorandum relates to the offering (the “Offering”) of Class B-1 Limited Partnership Units (the “Class B-1 Units”) by GPB Holdings III, LP, a Delaware limited partnership (the “Company,” “we” or “us”). We are separately (and not part of this Memorandum) offering Class A-1 Limited Partnership Units (“Class A-1 Units”), and may in the future offer Class A-2 Limited Partnership Units (“Class A-2 Units”), Class A-3 Limited Partnership Units (“Class A-3 Units”), Class A-4 Limited Partnership Units (“Class A-4 Units”), Class B-2 Limited Partnership Units (“Class B-2 Units”), Class B-3 Limited Partnership Units (“Class B-3 Units”), Class B-4 Limited Partnership Units (“Class B-4 Units”), Class I Limited Partnership Units (“Class I Units”), Class I-TE Limited Partnership Units (“Class I-TE Units”) and Class T Limited Partnership Units (“Class T Units”, and together with the Class A-1 Units, Class B-1 Units, Class A-2 Units, Class A-3 Units, Class A-4 Units, Class B-2 Units, Class B-3 Units, Class B-4 Units, Class I Units and Class I-TE Units, the “Units”). We are offering $1,500,000,000 in Units, which amount may be increased at the sole discretion of GPB Holdings III GP, LLC, our general partner (the “General Partner” or the “GP”). GPB Capital Holdings, LLC, a Delaware limited liability company, is the Company’s manager (“GPB” or the “Manager”) pursuant to the terms of the Managerial Services Agreement (the “Managerial Services Agreement”). Class B-1 Units are suitable only for sophisticated investors (i) who do not require immediate liquidity for their investments, (ii) for whom an investment in the Class B-1 Units does not constitute a complete investment program and (iii) who fully understand and are willing to assume the risks involved in our acquisition program. An investment in the Class B-1 Units involves significant risks. Prospective investors should carefully consider the information under “Risk Factors.” The Class B-1 Units have not been approved or disapproved by the Securities and Exchange Commission (the “SEC”) or the securities regulatory authority of any state, nor has the SEC or any such authority passed upon the accuracy or adequacy of this Memorandum. Any representation to the contrary is unlawful. The Class B-1 Units are being offered as a private placement to a limited number of investors, will not be registered under the 1933 Act, or the securities laws of any state or foreign jurisdiction, may not be sold or transferred without compliance with applicable federal, state, or foreign securities laws and may only be transferred in compliance with (as applicable) our Agreement of Limited Partnership (as the same may be amended from time to time, the “LPA”). There is no public market for the Class B-1 Units, and none is expected to develop. The Company does not intend to list Class B-1 Units on any exchange. The information in this Memorandum is given as of the date on the cover page, unless another time is specified, and investors may not infer from either the subsequent delivery of this Memorandum or any sale of Class B-1 Units that there has been no change in the facts described since that date. No representations or warranties of any kind are intended or should be inferred with respect to the economic return that may accrue to investors. Prospective investors must consider this investment to be highly illiquid. This Memorandum does not constitute an offer to sell or the solicitation of an offer to buy the Class B-1 Units by any person in any state or jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. No offering literature or advertising in any form other than this Memorandum and the agreements and documents referred to herein may be considered to constitute an offering of the Class B-1 Units.

THE OFFER AND SALE OF UNITS HEREBY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR RESOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.


In order to invest in the Company, investors will be required to execute a subscription agreement and related investor questionnaire (the “Subscription Documents”), attached in Exhibit C, which, among other things, requires that the investor certify as to its status as an “Accredited Investor” (as defined in the 1933 Act). We reserve the right, notwithstanding any such offer, to withdraw or modify the Offering and to reject any subscriptions for the Class B-1 Units in whole or in part for any or no reason. We intend to conduct our operations so that we will not meet the definition of an “investment company” and thus will not register under the Investment Company Act of 1940, as amended (the “1940 Act”). GPB is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), though such registration does not imply any type of qualification. GPB’s Disclosure Brochure (“Brochure”), which provides additional information about GPB, its business and management, is attached to this Memorandum as Exhibit B. To assist us in monitoring our status under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) so that our assets are not deemed to be “plan assets,” we will require each prospective investor to make certain representations regarding its status under ERISA and the Internal Revenue Code of 1986, as amended (the “Code”). Also, each investor will be required to obtain from any potential transferee of Class B-1 Units, for our benefit, representations as to the potential transferee’s status under ERISA and the Code, among other matters. See “Certain Tax, ERISA & Regulatory Matters.” Nothing set forth in this Memorandum constitutes a recommendation that any person take or refrain from taking any course of action within the meaning of U.S. Department of Labor Regulation §2510.3-21(b)(1). THIS MEMORANDUM DOES NOT PURPORT TO CONTAIN ALL OF THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY DESIRE IN INVESTIGATING US AND THE SUITABILITY OF PURCHASE OF THE CLASS B-1 UNITS. EACH INVESTOR MUST CONDUCT AND RELY UPON HIS / HER OR ITS OWN EVALUATION OF THE COMPANY AND OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, IN MAKING AN INVESTMENT DECISION. THIS MEMORANDUM IS CURRENT AS OF THE DATE SHOWN ON THE COVER. CHANGES IN OUR STATUS AND AFFAIRS MAY OCCUR AFTER THE DATE ON THE COVER OF THIS MEMORANDUM. No person other than GPB and/or the GP has been authorized to give any information other than that contained in this Memorandum, or to make any representations in connection with the Offering. This Memorandum contains summaries of certain agreements and other documents. While we believe these summaries are accurate, reference is made to the actual agreements and documents for more complete information about the rights, obligations and other matters in the agreements and documents. Consequently, each offeree must carefully read the documents included and described in this Memorandum before making a decision to invest in the Class B-1 Units. All summaries are qualified in their entirety by this reference. Copies of these agreements and other documents will be made available upon request. The contents of this Memorandum and any other communications from us or any of our officers, Limited Partners, employees, agents or affiliates should not be construed as legal, tax, investment or other advice. Each offeree should consult his or her own legal, tax and financial advisors to ascertain the merits and risks of the transactions described herein prior to subscribing for the Class B-1 Units. Each prospective investor is invited to meet with our representatives and to discuss with, ask questions of and receive answers from such representatives concerning the terms and conditions of this Offering and to obtain any additional information, to the extent that such representatives possess such information or can acquire it without unreasonable effort or expense, necessary to verify the information contained herein. Investors are asked to pay particular attention to “Certain Tax, ERISA & Regulatory Matters” which is a summary of certain U.S. federal income tax rules and considerations affecting investors, us and our operations and does not purport to be a complete analysis of all relevant tax rules and considerations or a complete listing of all potential tax risks inherent in purchasing, holding or disposing of Class B-1 Units. Each prospective investor is urged to consult its tax advisor in order to understand fully the United States federal, state, local and any non-U.S. tax consequences of such an investment in its particular situation. Certain of the factual statements made in this Memorandum are based upon information from various sources believed by GPB to be reliable. Neither we nor GPB has independently verified any of such information and will have no liability associated with the inaccuracy or inadequacy thereof.


FOR FLORIDA INVESTORS THE CLASS B-1 UNITS ARE BEING SOLD TO, AND ACQUIRED BY, THE INVESTOR IN A TRANSACTION EXEMPT UNDER §517.061(11) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT. THE CLASS B-1 UNITS HAVE NOT BEEN REGISTERED UNDER THAT ACT IN THE STATE OF FLORIDA. IN ADDITION, THE FLORIDA SECURITIES ACT PROVIDES THAT WHERE SALES ARE MADE TO 5 OR MORE FLORIDA INVESTORS, ALL FLORIDA INVESTORS SHALL HAVE THE PRIVILEGE OF VOIDING THE PURCHASE WITHIN 3 DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO A COMPANY, AN AGENT OF A COMPANY OR AN ESCROW AGENT, OR WITHIN 3 DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

FORWARD-LOOKING STATEMENTSCertain statements contained in this Memorandum, including statements containing the words “believes,” “anticipates,” “intends,” “plans,” “expects,” or words of similar import, constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Certain of these factors are discussed in more detail elsewhere in this Memorandum, including under“Summary of Key Terms,” “Risk Factors,” and “Related Parties & Conflicts of Interest.” Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

In addition, all materials or documents supplied by us, including any pro forma budgets or cash flows, should be considered speculative and are qualified in their entirety by the assumptions, information and risks disclosed in this Memorandum. The projections are based on assumptions made by GPB regarding future events. There is no assurance that actual events will correspond with these assumptions. Actual results for any period may or may not approximate projections and may differ significantly. Investors should consult with their tax and business advisors about the validity and reasonableness of any factual, accounting and tax assumptions. Due to the significant uncertainties inherent in any prediction of future events, the inclusion of such forward-looking statements should be regarded as illustrations only and should not be treated as a representation made by us as to the certainty of future results and not relied upon in making an investment decision concerning this Memorandum.

Neither we nor any other person or entity makes any representation or warranty as to the future profitability of an investment in Class B-1 Units.

This Memorandum is part of a continuous offering process. Periodically, as we acquire subsidiaries or we have other material developments, we may, but are under no obligation to provide a supplement, or amend the Memorandum, which may add, update or change information contained in this Memorandum. Any statements that we make in this Memorandum, as supplemented, will be modified or superseded by any inconsistent or updated statement made by us in a subsequent supplement or amendment to the Memorandum.

This Memorandum is confidential and proprietary to us. It is provided to the recipient in confidence with the understanding that the recipient will observe and comply with the terms and conditions set forth in this paragraph and the paragraphs below. The recipient’s acceptance and retention of this Memorandum constitutes an agreement to be bound by such terms and conditions. If any of such terms are not acceptable, this Memorandum should be promptly returned to:

GPB Holdings III, LP

c/o: GPB Capital Holdings, LLC 535 West 24th Street, Floor 4

New York, NY 10011 Telephone: (877) 489-8484 Facsimile: (516) 487-0166


TABLE OF CONTENTS

SUMMARY OF KEY TERMS ........................................................................................................................ 1SUMMARY OF GPB ACQUISITION PROGRAM ...................................................................................... 11MANAGEMENT .......................................................................................................................................... 21RISK FACTORS ......................................................................................................................................... 24COMPANY FEES & EXPENSES ............................................................................................................... 45ALLOCATION OF PROFITS & LOSSES ................................................................................................... 48RELATED PARTIES & CONFLICTS OF INTEREST ................................................................................ 48SUMMARY OF THE LPA ........................................................................................................................... 53SERVICE PROVIDERS .............................................................................................................................. 59CERTAIN TAX, ERISA & REGULATORY MATTERS .............................................................................. 59INVESTOR QUALIFICATION ..................................................................................................................... 69PLAN OF PRIVATE PLACEMENT ............................................................................................................ 71RESTRICTIONS ON TRANSFER OF UNITS ............................................................................................ 72USA PATRIOT ACT COMPLIANCE .......................................................................................................... 73ADDITIONAL INFORMATION.................................................................................................................... 74PRIVACY NOTICE ...................................................................................................................................... 75AVAILABILITY OF PRINCIPAL DOCUMENTS ......................................................................................... 75

EXHIBIT A: GPB HOLDINGS III, LP AGREEMENT OF LIMITED PARTNERSHIPEXHIBIT B: DISCLOSURE BROCHURE OF GPB CAPITAL HOLDINGS, LLCEXHIBIT C: SUBSCRIPTION DOCUMENTS EXHIBIT D: DISCLOSURE UNDER RULE 506(E) OF REGULATION D EXHIBIT E: LIST OF PORTFOLIO COMPANIES


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SUMMARY OF KEY TERMS

The following is a summary of the terms of the Offering and a description of the Company. It is qualified in its entirety by the more detailed information contained elsewhere in this Memorandum and by the terms and conditions of the LPA and the Subscription Agreement and other subscription documents (as the same may be amended from time to time, the “Subscription Documents”) related to the Offering, each of which should be read carefully by any prospective investor before investing. Prospective investors are urged to read the entire Memorandum and to seek the advice of their own counsel, tax consultants and business advisers with respect to investing in the Class B-1 Units. Capitalized terms used below and not otherwise defined will have the same meaning as provided in the LPA. If any disclosure made herein is inconsistent with any provision of the LPA or Subscription Documents, the provision of the LPA or Subscription Documents, as the case may be, will control. References below to other sections of this Memorandum are for convenience only and are not the only sections that should be considered with respect to the term summarized.

The Company ............. The Company was organized as a Delaware limited partnership on July 24, 2017 to operate as a private holding company.

Units ............................ Under this Memorandum, we are offering Class B-1 Units at a price of $50,000 per Unit (the “Offering Price Per Unit”).

Objective .................... We were formed primarily to (i) acquire majority voting interests (which, consistent with the 1940 Act, we define as holding 50% or more of the voting interests) and/or primary control (which means control that is greater than any other interest holder, hereinafter referred to as “primary control”) interests, whether equity, debt or otherwise, in income producing, middle-market private companies in North America, (ii) provide hands-on managerial and operational services to such companies, and (iii) further develop such companies’ operations and increase cash flow and current income from operations. We will focus on acquisitions of automotive retail (“Automotive Retail”) and technology-enabled services (“Technology-Enabled Services”) companies with strong management, earnings and market position. We will also, to a lesser extent, make acquisitions or investments in other opportunities outside the Automotive Retail and Technology-Enabled Services sectors (“Special Situations”). We also expect to purchase senior secured notes of (or otherwise make loans to) primarily small- and medium-sized North American businesses (“Debt Strategies”, and collectively with Automotive Retail, Technology-Enabled Services, Special Situations and the investments described in clause (i) above, “Portfolio Companies”).

With the exception of Debt Strategies, we expect that we will hold the interests in our Portfolio Companies, either directly or through an affiliated holding company and that we, through our Manager, will play an active role in managing and operating them. We intend to maintain a controlling position on the board of directors or as managers or by providing for other control mechanisms, such as maintaining at least equal control of the board of directors or managers, appointing one or more of the executive officers and/or having the right to approve major decisions. Our focus is on owning and operating Portfolio Companies on a long-term basis with a goal of maximizing returns for our investors by increasing the cash flows from these operations, which we expect to increase over time.

While acquisitions will be made for the purpose of generating income from operations and will be held for the long-term, we may consider strategic transactions on an opportunistic basis, such as an initial public offering, a spin-off of businesses, or sale of a Portfolio Company or a business line.

We intend to focus our assets primarily in the Automotive Retail and Technology-Enabled Services sectors, Special Situations in other sectors, and Debt Strategies. We generally acquire majority voting positions and/or primary control positions in Portfolio Companies. When fully invested and subject to 1940 Act-related limitations, no single strategy will comprise more than 35% of our portfolio


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on a cost basis, and no single Portfolio Company will comprise more than 15% of our portfolio on a cost basis.

There can be no assurance that we will achieve our objective or avoid substantial losses, including the loss of the investor’s entire investment. An investor should not make an investment in the Class B-1 Units unless they can hold such Class B-1 Units for the long-term or with the expectation of sheltering income. Investors are urged to consult with their financial advisors before investing in the Class B-1 Units. See “Summary of GPB Acquisition Program” and “Risk Factors.”

The General Partner .. GPB Holdings III GP, LLC serves as our General Partner. Under the LPA, the General Partner, to the exclusion of our limited partners (“Limited Partners,” “LPs” or “Investors”), conducts and manages our business. While the General Partner is responsible for the overall management and control of the Company, it has delegated all services and day-to-day activities to GPB. See “The Manager” below.

The Special LP GPB’s principals and certain other individuals and entities (including but not limited to certain employees, officers and directors of Ascendant Capital, LLC) that have assisted and may in the future assist in our operations are and/or will be members in GPB H3 SLP, LLC, a Delaware limited liability company (the “Special LP”). As described in more detail below, the Special LP will receive a profit allocation from the Company. The identity of the members of the Special LP and their relative ownership interests in that entity may change over time to reflect additions to and withdrawals from the Special LP, as determined by the Special LP and its governance documents.

As noted above, certain employees, officers and directors of Ascendant Capital, LLC (“Ascendant”), which is a branch office of and offers securities through Ascendant Alternative Strategies, LLC (“AAS”), an affiliate of GPB, may become members of the Special LP and, as such, may become entitled indirectly to receive profit allocations from the Company. AAS also acts as a placement agent for this Offering and is a member of the Selling Group (as defined below). Other placement agents for this offering may also be eligible to receive ownership interests in the Special LP in the discretion of the Special LP. For further discussion of the Company’s affiliation with Ascendant, please see “Related Parties & Conflicts of Interest – Ascendant.”

The Manager .............. GPB Capital Holdings, LLC, a Delaware limited liability company, is the Company’s manager pursuant to the terms of the Managerial Services Agreement. See “Management.”

Acquisition Committee ..................

GPB has an Acquisition Committee currently composed of six members who are nominated, appointed and removed by GPB. All Portfolio Company acquisition or disposal decisions require the approval of the Acquisition Committee. See“Management.”

Advisory Committee .. We will have an Advisory Committee composed of members who will be appointed by the GP and who will be independent of the GP, GPB and Ascendant (except to the extent a member may be employed by or otherwise affiliated with a member of our Selling Group other than Ascendant). In addition, see §3.16 of the LPA.

Auditor ........................ Our books of account and records, will be audited annually on the basis of generally accepted accounting principles in the U.S. (“GAAP”). McGladrey LLP (RSM), a firm registered with the Public Company Accounting Oversight Board (“PCAOB”), has been engaged as our auditor. The GP retains the authority to engage and dismiss any such auditors.

Administrator ............. The GP has engaged a financial services provider selected by it in its discretion—Phoenix American Financial Services, Inc. (the “Administrator”)—to perform various administrative services for us. See “Management.”

Risks ........................... In general, investment in the Class B-1 Units involves various and substantial risks, including the risks associated with our acquisitions and operation of the Portfolio Companies, risks for certain tax-exempt investors, risks related to the


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limited transferability of Class B-1 Units, our lack of operating history, our dependence upon key personnel, conflicts of interest and certain tax risks. See“Risk Factors” and “Certain Tax, ERISA & Regulatory Matters.”

Related Parties & Conflicts of Interest

GPB’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Compliance Officer (“C-Level Personnel”) will never be compensated by Portfolio Companies for serving as directors or officers of the Portfolio Companies, except to the extent certain C-Level Personnel receive compensation or other remuneration in connection with the provision of Operations Support Services, as described in greater detail in “Company Fees & Expenses – Partnership Expenses”. In addition, GPB, the Special LP and/or their respective affiliates (including any Holding Companies (as defined below), Portfolio Companies, or structuring vehicles of GPB or its affiliates), officers, directors, employees, agents and equity-holders, or any immediate family member of the foregoing (each, a “Related Party”) may have potential or actual conflicts of interest in connection with our activities and acquisitions. Related Parties may serve as officers, directors, accountants, advisors to or managers of Portfolio Companies or other companies (and receive fees or other compensation from such Portfolio Companies in connection therewith, as discussed in further detail below with respect to Operations Support Providers). Such other companies may have objectives or may implement strategies similar to ours.

The Company will not enter into any financial transaction, arrangement or other contractual relationship with a Related Party (except for Holding Companies, Portfolio Companies, or other subsidiaries of the Company, and except for the Managerial Services Agreement, the Dealer Manager Agreement and any transactions relating to the joint venture co-investments by the Company and Other GPB Entities (as defined below)) (a “Related Party Transaction”) without the approval of all of the members of the Advisory Committee. With respect to Related Party Transactions that are acquisitions, (i) the acquisition must be documented in writing by the General Partner and Advisory Committee as being on terms no less favorable to the Company as could be obtained in a transaction negotiated at arms-length with a person whom the GP has determined has no material relationship with GPB or the Company (either directly or as a partner, shareholder or officer of an affiliate (an “Independent Person”), (ii) the General Partner must provide the Advisory Committee with an independent valuation of the proposed acquisition, and (iii) the Advisory Committee must determine that the acquisition is in the best interests of the Company. In addition, the General Partner will not cause the Company to purchase an asset from, or sell an asset to, any other accounts, Holding Companies or entities sponsored or managed by GPB (“Other GPB Entities”), except to the extent such transaction (i) is part of a consolidation or “roll up” of Portfolio Companies for the eventual purpose of creating liquidity (each, a “Roll Up Event”) and (ii) complies with the Related Party Transaction conditions set forth above. The strategies of Other GPB Entities may overlap with one or more of our acquisition strategies. If a potential Portfolio Company acquisition fits the acquisition objective of one or more GPB sponsored entities, the GPB Acquisition Committee will allocate opportunities in good faith and on a basis believed to be fair and equitable, and no GPB sponsored entity shall receive preferential treatment over another. In order to ensure all Portfolio Company acquisitions are allocated fairly, the GPB Acquisition Committee will consider the GPB sponsored entity’s specific circumstances and adhere to the Allocation Policy. See “Allocation of Opportunities” below.

We will not enter into any loan agreements with Other GPB Entities (“Inter-Company Loans”). See “Related Parties & Conflicts of Interest - Principal Transactions; Borrowing.”

When a Portfolio Company (or group of Portfolio Companies) in the Automotive Retail sector is acquired by the Company and Other GPB Entities in connection with a joint venture, financing arrangements may carry joint and/or several obligations among the assets of such Portfolio Companies (or among such Portfolio Companies). In such situations, these joint and/or several obligations


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are generally limited to the specific assets of the Portfolio Companies for which the financing is being utilized.

As described in greater detail in “Company Fees & Expenses – Partnership Expenses”, from time to time, GPB may identify companies and individuals, which include affiliates and employees of GPB, and third-party consultants and advisors who have relevant industry experience and employ their assistance in the operation of a particular Portfolio Company or group of Portfolio Companies in the same sector. We refer to these persons as “Operations Support Providers.” Fees and expenses associated with the retention of Operations Support Providers are generally paid and/or reimbursed by the Company but may be paid or reimbursed by the relevant Portfolio Company. Operations Support Providers (including those employed by or affiliated with GPB, or those who may subsequently become associated with GPB directly) may be compensated by the Company or at the Portfolio Company level using cash or equity, or at the subsidiary level to such person using cash or equity in such subsidiary entities we use to hold our Portfolio Company acquisitions (“Holding Companies”). We believe incentive compensation arrangements with the Operations Support Providers are necessary for the success of our business and ultimately in the best interest of investors. The receipt of such compensation by an Operations Support Provider that is an affiliate or employee of GPB will not reduce any fees otherwise payable to GPB by the Company.

For further discussion on Related Parties and Conflicts of Interest, see “Risk Factors” and “Related Parties & Conflicts of Interest.”

Allocation of Opportunities .............

GPB or its affiliates may organize Other GPB Entities that may wish to acquire interests in companies in the same target sectors we are pursuing, and the Other GPB Entities may wish to joint venture with us. If a potential Portfolio Company acquisition fits our objective and the objective of one or more Other GPB Entities, and each have capital available to acquire interests in the potential Portfolio Company, GPB will allocate the opportunity among us and Other GPB Entities consistent with its allocation policies and procedures, which take into account various factors, including but not limited to:

The amount of capital each participant has available, as compared to the total amount of capital each participant anticipates raising;

The extent to which the potential Portfolio Company acquisition deviates from the participants’ acquisition objectives; and

The extent to which the potential acquisition would promote the participants’ sector, geographic, brand or other diversification goals.

See “Risk Factors” and “Related Parties & Conflicts of Interest.”

Leverage ..................... We expect to utilize debt, or leverage, on a limited basis to help finance our acquisitions of some Portfolio Companies. Under the LPA, we may not incur debt exceeding the lesser of (i) 50% of the aggregate amount the General Partner expects us to raise in our offering of Class B-1 Units and other unit classes, and (ii) 50% of our gross asset value (for such purpose, excluding the borrowings of any Portfolio Company) determined by the General Partner as of the date such indebtedness is incurred. See “Risk Factors—General Investment Risks—Leverage.”

Investor Qualification Class B-1 Units are offered in the United States to persons that are “Accredited Investors,” as defined in Regulation D (“Regulation D”) under the 1933 Act (“Accredited Investor”), purchasing for their own account or one or more accounts with respect to which they exercise sole investment discretion.

An investment in the Class B-1 Units is suitable only for persons who have adequate means of providing for their current needs and personal contingencies and have no need for liquidity in their investment. An investment in the Class B-1 Units should not be made by any person who (i) cannot afford a complete loss of investment and (ii) has not carefully read or does not understand this Memorandum, including the portions concerning the risks and the income tax


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consequences of an investment in the Class B-1 Units. The General Partner, in its sole discretion, may decline to admit any subscriber to the Class B-1 Units for any reason. See “Investor Qualification.”

The Offering ............... We are offering $1,500,000,000 of Units, which amount may be increased at the sole discretion of the General Partner. During the Offering, Units will be offered as follows: (i) Class A-1 Units and Class B-1 Units will be offered until the closing date in the month in which an aggregate of at least $200 million Units have been sold; (ii) thereafter, Class A-2 Units and Class B-2 Units will be offered until the closing date in the month in which an aggregate of at least $500 million Units have been sold; (iii) thereafter, Class A-3 Units and Class B-3 Units will be offered until the closing date in the month in which an aggregate of at least $1 billion Units have been sold; and (iv) thereafter, Class A-4 Units and Class B-4 Units will be offered. The Units will be subject to different Preferred Return (defined below) rates and Net Distribution Share (as defined in the LPA), as outlined below. Also see “Distributions” below.

Class of Units Class Offering Period

Preferred Return Rate

A-1 At least $200 million Units sold 10%B-1

A-2 Greater than $200 million and until at least $500 million Units sold 9%B-2

A-3 Greater than $500 million and until at least $1 billion Units sold 8%B-3

A-4 Greater than $1 billion Units sold 7%B-4

Offers and sales of the Class B-1 Units are made on a “best efforts” basis by broker-dealers who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or their local equivalent, or recommended by investment advisers (collectively, the “Selling Group”). AAS is a member of the Selling Group. For further discussion of the Company’s affiliation with Ascendant, please see “Related Parties & Conflicts of Interest – Ascendant.” Members of the Selling Group may also include investors in the Units. We may agree to indemnify certain members of the Selling Group against certain liabilities, including liabilities under federal and state securities laws, or to potentially contribute to payments that they may be required to make in respect of those liabilities.

Fees & Expenses ....... The Company will bear the following fees and expenses:

Servicing Fee: The Company will pay broker-dealers, certain employees, officers and directors of Ascendant, or other affiliates of the Company an annual servicing fee equal to 0.4% of all Capital Contributions attributable to Class B-1 Units (the “Servicing Fee”), initially payable upon an investor’s subscription for Class B-1 Units and payable annually for so long as such investor holds an interest in such Class B-1 Units. GPB reserves the right to pay Servicing Fees that are less than or more than the foregoing amount.

Upon acceptance of a Limited Partner’s subscription, a portion of such Limited Partner’s subscription will be used to pay the Servicing Fee. The Servicing Fees are in addition to and not in lieu of the Managerial Assistance Fees, Acquisition Fees, Organizational Expenses and Partnership Expenses payable by the Company. See “Company Fees & Expenses.” The Servicing Fees are different


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from the fees and commissions paid by investors in the Class A-1 Units being separately offered by the Company through different distribution channels.

Managerial Assistance Fee: GPB will receive an annualized fee (the “Managerial Assistance Fee”), payable by the Company pursuant to the Managerial Services Agreement, quarterly in advance of 2.0% per annum on the Capital Contributions (as defined below) made to the Company for providing managerial assistance and other services to us and our Portfolio Companies. Those services include conducting our day to day operations as described below, along with providing reports to LPs and other duties delegated to GPB pursuant to the Managerial Services Agreement. The Managerial Assistance Fee does not include any expenses related to In-House Services and Operations Support Services (defined below) provided to the Company or its Portfolio Companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee, and any such expenses will be reviewed by the Advisory Committee on an annual basis.

GPB, in its sole discretion, may defer, reduce or waive all or a portion of the Managerial Assistance Fee with respect to one or more Limited Partners for any period of time (and intends to waive the Managerial Assistance Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company).

GPB has the right to assign all or a portion of the Managerial Assistance Fee to properly licensed third parties (where licensing is required) for services rendered by persons in connection with the offering of Units, including placement agents that are members of the Selling Group, such as AAS. Neither the Company nor GPB will be required to notify any other Limited Partner if and when GPB determines to defer, reduce or waive any Managerial Assistance Fee for a Limited Partner, nor will the Company or GPB be required to offer the same reduction or waiver to any other Limited Partner.

Acquisition Fee. Upon the consummation of any acquisition of a Portfolio Company, the Company will pay qualified third parties, including members of the Selling Group (other than persons holding an interest in the Portfolio Company), an acquisition fee of 1.75% of the total acquisition cost of the Portfolio Company (the “Acquisition Fee”). The Acquisition Fee will be paid in consideration of services provided in our Offering, including but not limited to identifying, structuring and providing us with advice on our acquisitions or capital raising efforts. GPB presently anticipates the Company paying Acquisition Fees to Ascendant Alternative Strategies, LLC, of which Ascendant is a branch office, and we may identify other third parties for which we determine such compensation would be appropriate. GPB, in its sole discretion, may defer, reduce or waive the Acquisition Fee with respect to one or more Limited Partners (and intends to waive the Acquisition Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company).

Organizational Expenses: All fees, costs and expenses, up to 1.25% of the gross proceeds received by (or expected to be received by) the Company from the Offering, actually incurred by the Company, the GP, its affiliates or a third party, through the final closing of the Company, in connection with the Offering and organization of the Company, any feeder vehicles that invest directly or indirectly in the Company (including any employee vehicles), Parallel Vehicles and/or blocker corporations, and the GP, including (i) the preparation of the LPA and the organizational agreements of such other entities, or any amendment or restatement of the LPA or such other agreements (to the extent prepared in connection with the formation or organization of the Company or any transaction at or in connection with any closing), (ii) the preparation of any offering documents, subscription materials and related documents in connection with any Offering, (iii) legal, accounting, filing, consulting and other professional fees and expenses, (iv) a reasonable allocation of time expended by the GP or its affiliates, and their respective employees and representatives, and (v) all other costs and expenses (including travel and entertainment expenses relating to capital raising efforts) actually incurred by the Company, the GP or affiliates thereof


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(“Organizational Expenses”), will be paid or reimbursed by the Company. Any Organizational Expenses in excess of such amount will be paid by the General Partner or its affiliates.

While the GP is entitled to full reimbursement of Organizational Expenses up to the cap (which is in part based on our expected Offering size), it may defer reimbursements of a portion of Organizational Expenses in its discretion. Additionally, while the GP is entitled to reimbursements based on the expected offering size, if the Company does not raise the full amount of the expected Offering size, the GP will return any such reimbursement amount exceeding 1.25% of the gross proceeds received by the Company in the Offering.

Partnership Expenses. The Company will pay its own operating expenses as further detailed in “Company Fees & Expenses – Partnership Expenses” and Section 3.3 and 3.5 of Article 3 of the LPA, attached hereto as Exhibit A. The General Partner is responsible for its or its affiliates’ general and administrative costs and expenses and its day-to-day overhead expenses of managing the Company and is not entitled to be reimbursed by the Company for such expenses other than for the portion of the total compensation of the General Partner’s or its affiliates’ (including Holding Companies) officers and employees relating to the time such officers or employees provide In-House Services or Operations Support Services (as defined in “Company Fees & Expenses”) to the Company or its Portfolio Companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee, and any such expenses will be reviewed by the Advisory Committee on an annual basis. “In-House Services” include but are not limited to accounting, legal, compliance, information technology, HR, and operational and management services to the Company or the Portfolio Companies. For additional information on In-House Services and Operations Support Services, see “Related Parties & Conflicts of Interest” above and “Company Fees & Expenses – Partnership Expenses” below.

Distributions .............. The GP intends for us to make periodic distributions of cash, if any, to each LP beginning on the fifteenth day of the third month following such LP’s applicable subscription for Units. We will apportion and make distributions of cash as it’s available (after payment of any tax distributions, see below, and payment and reservation of all amounts deemed necessary by the GP) in the following amounts and order of priority:

Amounts will initially be apportioned among the LPs in respect of each class of their Units in proportion to each class of Unit’s Net Distribution Share (as defined in the LPA) and will be further apportioned between each such LP and the Special LP and, except as otherwise provided in the LPA, distributed with respect to each such Partner in respect of each class of its Units (on a Partner by Partner basis) as follows:

(i) first, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (i) equal to such LP’s Net Capital Contribution (as defined below) plus the aggregate amount (if any) of any waivers of or reductions in fees that would otherwise be attributable to such LP in respect of such class of Units;

(ii) second, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (ii) and clause (i) equal to such LP’s aggregate Capital Contributions with respect to such class of Units;

(iii) third, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (iii) and clause (v) below in an amount equal to the Preferred Return with respect to such class of Units (as defined below);

(iv) fourth,100% to the Special LP until the cumulative distributions in respect of such class of Units made to the Special LP pursuant to this clause (iv) equal 20% of the sum of all amounts distributed to such LP in respect of


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such class of Units pursuant to clauses (ii) and (iii) and to the Special LP pursuant to this clause (iv) (the “Catchup”); and

(v) fifth, 80% to such LP and 20% to the Special LP (together with the Catchup, distributions to the Special LP being the “Performance Allocation”).

“Preferred Return” means: (i) with respect to Class A-1 Units and Class B-1 Units, an amount equal to the cumulative sum of 10% per year; (ii) with respect to Class A-2 Units and Class B-2 Units, an amount equal to the cumulative sum of 9% per year; (iii) with respect to Class A-3 Units and Class B-3 Units, an amount equal to the cumulative sum of 8% per year; and (iv) with respect to Class A-4 Units and Class B-4 Units, an amount equal to the cumulative sum of 7% per year, and in each case multiplied by, for each such year, the average of the 12 monthly excesses for such year of such LP’s Capital Contribution(s) over distributions through each such month, in each case with respect to such class of Units.

Additionally, the GP may cause the Company to advance amounts to the Special LP sufficient to cover tax liabilities of the Special LP or its members attributable to allocations of amounts under clauses (iv) and (v) above (“tax distributions”). Any such tax distributions will be treated as an advance against any future distributions that the Special LP is entitled to under clauses (iv) and (v) above.

Because of differences in the amount of Selling Fees (as defined below) attributable to LPs holding different Unit classes, there may be variances in the amounts individual LPs receive from the Company. “Selling Fees” include any sourcing, commitment, financing, transaction, investment banking, brokers’, finders’, and other similar fees payable to a selling agent for any offering or sale of Units, including the Commissions, Wholesaling Fees and the Placement and Marketing Support Fees (as defined in the LPA) respecting Class A-1 Units and the Servicing Fee respecting Class B-1 Units. See “Summary of the LPA.”

We reserve the right to return Capital Contributions to LPs as part of our distributions, though we do not presently have plans to do so.

The LPA authorizes the General Partner to withhold and pay taxes. If the General Partner withholds taxes with respect to an LP (including a former LP), or if taxes or other amounts withheld from a payment to or otherwise borne by the Company are attributable to an LP or former LP, such amounts will be treated as a loan to such LP or former LP, repayable on demand, or, at the General Partner’s option, discharged from distributions otherwise payable to such LP or former LP (provided that such LP or former LP will be deemed to have received the full distribution unreduced by any such repayment). Each LP (and former LP) will indemnify and hold harmless the Company, General Partner, and other LPs with respect to any such amounts.

Capital Contributions Investors must purchase a minimum of $50,000 of Class B-1 Units, subject to reduction or waiver at the GP’s sole discretion. The GP may, in its discretion, reject any subscription request, in whole or in part for any or no reason. All subscriptions for Class B-1 Units are irrevocable.

The Administrator will establish and maintain on our books a capital account (“Capital Account”) for each LP into which such Limited Partner’s capital contribution (“Capital Contribution”), net of Selling Fees (such net amount being referred to as the “Net Capital Contribution”) will be credited.

Subscription Procedures .................

To subscribe for Class B-1 Units, a new subscriber must (i) complete, execute and deliver to the Administrator the Subscription Documents and (ii) arrange for payment of the amount of the subscription in accordance with the instructions in the Subscription Documents. Generally, existing LPs subscribing for additional Class B-1 Units need only fill out an “Additional Contribution” form and update information in the Subscription Documents that may have changed.

The GP generally requires receipt of Subscription Documents at least three business days prior to the requested Monthly Closing Date. We will hold subscription proceeds paid in connection with the Offering until the subscription


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is accepted or rejected by us. Subscriptions will only be accepted on the first day of the month following receipt and acceptance of the Subscription Documents and Subscription funds by the Administrator (the “Subscription Effective Date”). Subscriptions that are not accepted will be returned as promptly as practicable after the relevant requested Monthly Closing Date. Subscription funds must be credited to us at least three business days prior to the requested Monthly Closing Date in order for a subscription to be accepted (except as otherwise determined by the GP in its discretion).

A subscriber admitted to the Company receives, in exchange for its initial Capital Contribution and any subsequent Capital Contribution, Class B-1 Units representing a proportionate share of the Company at that time, based upon the Units of all LPs.

Parallel Funds ............ The GP may establish one or more parallel entities (each, a “Parallel Vehicle”). In furtherance of the foregoing, the GP may, but is not obligated to, admit an LP as a participant in a Parallel Vehicle, and in connection therewith and in consideration for the redemption of all or a portion of its Units, such Limited Partner shall receive an equivalent interest in such Parallel Vehicle. The form of organizational documents for each Parallel Vehicle shall be substantially the same in all material respects as those of the Company, subject to any legal, tax, accounting or other similar regulatory considerations.

Parallel Vehicles may acquire a partial ownership interest in each of the Portfolio Companies on substantially the same terms and conditions as the Company in all material respects. Subject to any legal, tax, accounting or other considerations, the Partnership and each Parallel Vehicle will bear any Partnership Expenses and fees and any similar expenses of such Parallel Vehicle in proportion to their relative Capital Contributions; provided that Partnership Expenses and any similar expenses of each Parallel Vehicle that are specifically attributable to the Company or a particular Parallel Vehicle may be borne by the Company or such Parallel Vehicle, as applicable, as determined by the GP in its sole discretion. The voting rights of LPs generally will be aggregated with those of the investors in such Parallel Vehicles, as appropriate, for the purposes of determining the requisite majority or other specified percentage in interest thresholds for decisions relating to the Company.

Limitation of Liability; Indemnification ..........

The LPA limits the GP’s and the Manager’s liability and provides for indemnification of the GP, the Manager, the tax matters member or partnership representative and their respective affiliates, as well as members of the Advisory and Acquisition Committees. We are authorized to enter into agreements, including the administration and custodian services agreements that provide for indemnification of third parties in connection with transactions with or services provided to us. See “Summary of the LPA” and the LPA.

Acquisition Strategy Acquisitions will be made for the purpose of generating income from operations and will be held for the long-term. Dispositions may, however, be made on an opportunistic basis.

Redemption & Liquidity ......................

Limited Partners do not have the right to redeem their Class B-1 Units except in limited circumstances described below under “Summary of the LPA.” See the LPA.

General Partner Removal ......................

The GP may be removed as General Partner upon the affirmative vote (whether given in writing, by means of electronic transmission, or at any meeting duly called in accordance with Section 3.10 of the LPA) of at least 20% of the LPs, without regard to ownership percentage, who are not affiliates of the GP to remove the GP if any of the following events occur: (i) a final, non-appealable judicial determination that the GP has committed fraud, gross negligence or willful misconduct in connection with its material obligations to the Company under the LPA, provided that such fraud, gross negligence or willful misconduct has a material adverse effect on the Company, or (ii) (A) an action or proceeding under the United States Bankruptcy Code is filed against the GP and (I) such action or proceeding is not dismissed within 90 days after the date of its filing or (II) the GP files an answer acquiescing in or approving of such action or proceeding, (B) an action or proceeding under the United States Bankruptcy


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Code is filed by the GP or (C) a receiver or conservator is appointed to take control of the GP or all or a substantial portion of its property.

Compulsory Transfer or Acquisition of Class B-1 Units ..........

The LPA grants the GP the authority to require an LP to transfer his / her Units or, if the LP does not transfer its Units within 21 days, to have the Company reacquire them for the price paid by such LP without interest. The GP may exercise this power if, in its sole determination, any continued holding of Units by any direct or beneficial Limited Partner might cause or be likely to cause (i) us to be classified as a “publicly traded partnership” under the Code (a “PTP”), (ii) our assets to be considered “plan assets” within the meaning of ERISA or Code §4975 or applicable regulations, (iii) the Units to be required to be registered under the Securities Exchange Act of 1934 (the “1934 Act”), (iv) the Company to be required to be registered under the 1940 Act, or (v) some other legal, regulatory, pecuniary, tax or material administrative disadvantage to us, the GP, the Special LP or the LPs (each of (i) through (v), an “Adverse Effect”).

Restrictions on Transfers; Withdrawals ...............

LPs may not transfer Units without the GP’s consent and unless certain other conditions are satisfied or waived. Any transfers permitted by the GP will be made only on a monthly basis. The transferability of the Units is also restricted by federal and state securities laws. See “Risk Factors.” The LPA contains customary provisions allowing for the transfer and re registration of Units upon the death of a Limited Partner, subject to certain conditions. See “Summary of the LPA” and the LPA.

Periodic Reports ........ The GP will deliver to each LP within 120 days following the end of each Fiscal Year, beginning in 2018 (i) financial statements for such Fiscal Year prepared on a GAAP basis and audited by a PCAOB-registered firm, and (ii) all necessary tax reporting information to satisfy reporting obligations under the Code with respect to any acquisitions we make in any entities organized or formed in jurisdictions outside the United States.

Within 45 days after the end of each fiscal quarter, the GP will use best efforts to deliver to each LP an unaudited summary investment report for such quarter. If our Units are registered under the 1934 Act and we begin filing quarterly reports with the SEC, the GP may elect to substitute the 10-Qs we file with the SEC for the summary investment report. See “Summary of the LPA” and the LPA.

Fiscal Periods ............ Our fiscal year ends December 31 (“Fiscal Year”), and our fiscal quarter ends are March 31, June 30, September 30 and December 31. The GP may change such fiscal period end-dates in its reasonable discretion.

Tax Considerations The Company intends to be treated as a partnership, and not as an association taxable as a corporation, for U.S. federal income tax purposes. Prospective investors should carefully review the tax considerations discussed under “Certain Tax, ERISA & Regulatory Matters – Certain Tax Considerations” below and consult their own tax advisors as to the federal and applicable state, local and non-U.S. tax consequences of an investment in the Company.

The Company’s anticipated activities are expected to produce income that is subject to taxation as unrelated business taxable income (“UBTI”) under Sections 512 and 514 of the Code. Certain other special tax considerations may be applicable to tax-exempt investors investing in the Company.

Employee Benefit Plan Considerations ..

We may accept contributions from tax-exempt investors, including entities subject to ERISA and/or Code §4975. We intend to operate the Company as a “venture capital operating company” or otherwise so that our assets will not be treated as the “plan assets” of such investors. Prospective investors and subsequent transferees of Units will be required to make certain representations regarding their status under ERISA, and to assist us in monitoring our status under ERISA. If we fail to qualify for a “plan assets” exception, our assets may be considered “plan assets” under ERISA, which could result in adverse consequences to us, GPB and the fiduciaries of benefit plan investors. See “Certain Tax, ERISA & Regulatory Matters.”


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SUMMARY OF GPB ACQUISITION PROGRAMIntroduction We were formed primarily to (i) acquire majority voting interests (which, consistent with the 1940 Act, we define as holding 50% or more of the voting interests) and/or primary control (which means control that is greater than any other interest holder, hereinafter referred to as “primary control”) interests, whether equity, debt or otherwise, in income producing, middle-market private companies in North America, (ii) provide hands-on managerial and operational services to such companies, and (iii) further develop such companies’ operations and increase cash flow and current income from operations. We will focus on acquisitions of automotive retail (“Automotive Retail”) and technology-enabled services (“Technology-Enabled Services”) companies with strong management, earnings and market position. We will also, to a lesser extent, make acquisitions or investments in other opportunities outside the Automotive Retail and Technology-Enabled Services sectors (“Special Situations”). We also expect to purchase senior secured notes of (or otherwise make loans to) primarily small- and medium-sized North American businesses (“Debt Strategies”, and collectively with Automotive Retail, Technology-Enabled Services, Special Situations and the investments described in clause (i) above, “Portfolio Companies”).

A key component of our strategy is to concentrate our acquisitions on Portfolio Companies that will allow us to distribute the highest level of income to LPs from cash flows from operations, which we expect to increase over time. Our performance will substantially depend on our operation of our Portfolio Companies.

Acquisition Strategy GPB believes achieving the greatest profitability from owning and operating Portfolio Companies begins with concentrating acquisition activities and resources in the right sectors and businesses. For this reason, our Portfolio Companies generally meet the following fundamental acquisition criteria:

They have strong, consistent cash-flows generated from operations;

Their strategies and business plan are viable in changing market conditions;

They operate in industries or sectors with defined barriers to entry or that have clear, sustainable, competitive advantages, making it difficult for new entrants; and

Their management teams have a verifiable track record of success

Targeted Industries GPB’s Senior Management team and the directors of the relevant Portfolio Companies have extensive experience owning and operating companies in the Automotive Retail and Technology-Enabled Services sectors, so we anticipate a majority of our assets will be allocated in these sectors or in Portfolio Companies that have crossover with these sectors. Because of the experience of GPB’s Senior Management and long-term established relationships, we believe these sectors lend themselves particularly well to our acquisition strategy.

We intend to focus our assets primarily in the Automotive Retail and Technology-Enabled Services sectors, Special Situations in other sectors, and Debt Strategies. We generally acquire majority voting positions and/or primary control positions in Portfolio Companies. When fully invested and subject to 1940 Act-related limitations, no single strategy will comprise more than 35% of our portfolio on a cost basis, and no single Portfolio Company will comprise more than 15% of our portfolio on a cost basis.

GPB Acquisition Parameters In addition to identifying potential acquisitions from targeted industries where we believe GPB’s experience, relationships, and operational expertise create a significant advantage, a GPB acquisition will also typically meet the following parameters:

Income producing, private, middle-market companies with operations focused in North America;

Existing businesses, target operating history of at least five years;

Target acquisition size between $10M and $250M;

Target enterprise values between $20M and $500M;

Transaction types:

o Growth equity / expansion capital


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o Strategic follow-on acquisitions for Portfolio Companies

o Restructurings, reorganizations, and refinancing

o High growth, secured financing

GPB focuses on identifying, acquiring majority voting and/or primary control interests in expansion-stage companies, and operating these companies. We believe there are a significant number of companies within the Automotive Retail and Technology-Enabled Services sectors fitting our acquisition criteria, as well as Special Situations in other sectors. We believe many of these companies can principally benefit from the operational expertise and resources GPB provides. GPB believes its portfolio and its platform Portfolio Companies will be able to add value to the target acquisitions and improve operating margins by increasing real revenues, improving margins, and adding planned efficiency measures to operations.

Operations Support Providers From time to time, GPB may identify companies and individuals, which include affiliates and employees of GPB, and third-party consultants and advisors, who have relevant industry experience and employ their assistance in the operation of a particular Portfolio Company or group of Portfolio Companies in the same sector. We refer to these persons as “Operations Support Providers.” Operations Support Providers are industry specialists who have proven track records of success in owning and operating Portfolio Companies. Our goal is to keep existing, proven management teams in place upon acquisition and incentivize them to keep all interests aligned with the Company.

Operations Support Providers may be compensated at the Portfolio Company level using cash or equity (“Equity Compensation”) or at the subsidiary level to such person using cash or equity in such subsidiary entities we use to hold our Portfolio Company acquisitions (“Holding Companies”), and may become associated with GPB directly. For additional information on Operations Support Providers, see “Company Fees & Expenses – Partnership Expenses” below.

Operations After finalizing an acquisition of a Portfolio Company, GPB typically takes on the operational oversight of the Portfolio Company. GPB is responsible for a systematic process of operating, maintaining and upgrading assets, and ensuring that Portfolio Companies meet projected operating milestones and maximize overall cash flow from operations. This requires regular and effective communication with the day-to-day operating personnel and management team with which GPB partners. If milestones are not being met, GPB works with the day-to-day operating personnel and management team to make course corrections as necessary.

—Automotive Retail— Market Opportunity With over 16,500 franchised new car dealers and over $1 trillion in sales, the franchised auto dealer industry is the largest retail business segment in the U.S.1,2 Despite its size, the industry is highly fragmented with more than 90% of the dealers privately owned, creating a large number of potential acquisition targets.3 In many cases, existing dealers will have owned an individual or group of dealerships for many years, even decades, and have no succession plan. Thus, we may offer a viable exit strategy for those dealers seeking a buyer.

The franchised auto dealer industry provides opportunities for strong and increasing cash flows from operations. From 1983-2016, the most recent period for which data is available, dealers averaged a pretax return on equity of 24.7%, and during the economic downturn of 2008 and 2009, the average dealership return on equity was 12.3% and 18.0%, respectively.4

In 2016, approximately 17.6 million new vehicles were sold in the United States versus 2015’s 15.5 million, both record breaking years.5 As shown in the chart below, the Automotive Retail sector has proven its resilience through challenging economic times.6 We believe the industry will remain attractive for acquisition

1 BAML Auto Dealer Manual 2016, September 29, 2016 2 NADA Data 2016: https://www.nada.org/2016NADAdataHighlights/ 3 BAML Auto Dealer Manual 2016, September 29, 2016 4 BAML Auto Dealer Manual 2015, September 30, 2015 5 CNN Money: http://money.cnn.com/2017/01/04/news/companies/car-sales-2016/ 6 BAML Auto Dealer Manual 2015, September 30, 2015


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through 2017 and beyond.

We believe the strength of new vehicle sales in the United States is supported by the following factors:

Pent up demand – the average age of a vehicle is currently over 11 years old. Prior to the recession, the average vehicle age rarely surpassed 8 years. This, coupled with a historically high number of miles driven, point to the need for replacement vehicles.7

New Models – manufacturers are bringing to market near historical highs in new product launches. This drives buyers into showrooms leading to increased sales.

Auto loan interest rates are near all-time lows, with the average new 48-month loan rate remaining below 5.0% since May 2012.8

Gas prices have dropped significantly— the average annual price per gallon of regular fuel has dropped from $3.62 in 2012 to $2.14 in 2016.9

Consumer confidence is strong – The Conference Board Consumer Confidence Index, a barometer of the health of the U.S. economy from the perspective of the consumer, rose to a level of 121.1 in July 2017, a level not seen since July 2001.10

Acquisition Strategy

The Automotive Retail business fits precisely within GPB’s acquisition strategy of acquiring income-producing, middle-market private companies with high barriers to entry, high sustainable cash flow, recession resilient, and proven management teams.

GPB’s acquisition strategy is to focus on manufacturers with a strong commitment to the U.S. market. Manufacturers will include both domestic and foreign brands while also considering geographic diversification, though we may not have access to all manufacturers with which we otherwise may wish to acquire dealerships. We will seek to target acquisitions throughout the U.S. The automotive retail portfolio of GPB sponsored entities is located mainly in the Northeast, with a solid pipeline of dealerships in additional

7 BAML Auto Dealer Manual 2016, September 29, 2016 8 Federal Reserve Bank of St. Louis: https://fred.stlouisfed.org/series/termcbauto48ns 9 U.S. Energy Information Administration: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_NUS_DPG&f=A 10 USA Today: https://www.usatoday.com/story/money/2017/07/25/u-s-consumer-confidence-16-year-high/508178001/


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markets currently under screening or due diligence.

Market multiples and manufacturer acceptance are major considerations when making acquisitions. With this in mind, GPB will concentrate mainly on mid-line brands which we believe can generate higher returns for investors and which we believe we will have the most success in obtaining manufacturer approval.

In addition to single dealership acquisitions, we may also acquire interests in dealership groups, either partially or through complete group acquisition. Consolidated group acquisitions allow for existing back-office consolidation and other operational efficiencies to be leveraged, saving time and resources. Acquiring a group of dealerships can also allow for a more efficient due diligence process and capital deployment, allowing more rapid scaling. There is also a regional advantage as dealership groups may be located along a single location or concentrated in an auto mall, which allows for greater visibly and recognition. This has been a historically effective way of doing business in this sector.

High, Sustainable Current Cash Flow Automotive dealerships that are targets for acquisition into our portfolio will typically have a projected cash-on-cash yield of 15% at the Portfolio Company level. Our strategy is to acquire only those automotive assets that GPB strongly believes can support such a yield, with potential acquisitions sourced through GPB’s Automotive Retail Managing Partner and our Automotive Management Team, both of whom have deep and long-standing ties within the industry. Consistently bringing high-yielding automotive assets into our portfolio by leveraging relationships will be critical to meeting our acquisition and profitability goals.

According to the following chart from the National Automobile Dealers Association (NADA) and BAML, the average annual U.S. auto dealership pretax profit was over $1.4 million in 2016, providing a stable income stream. Further, a single auto dealership comprises multiple sources of income, including new and used vehicle sales, service and parts sales, and finance and insurance product sales. Manufacturers also compensate the dealership with incentive monies for achieving certain sales volume levels and strong customer service survey scores. These incentives can be a significant source of profit for a dealership.

High Barriers to Entry In addition to high capital requirements, another key barrier to entry in the Automotive Retail industry is thefranchisee approval process. All franchisees need to possess a certain level of industry experience in order to garner manufacturer’s approval to own and operate new car dealerships. Our Automotive Management Team has significant operational experience in the industry as well as hands-on experience working in the retail environment. This vast knowledge of the business (day-to-day expertise) coupled with valuable relationships at both the manufacturer and dealership level, can improve our ability to gain manufacturer approval—though certainly does not assure it. Their expertise is necessary for operational success and has allowed our Automotive Management Team to build a pipeline of acquisitions and open-points (the opening of a new dealership for a given manufacturer in a location where none previously existed) from manufacturers. While we believe our Automotive Management Team’s industry experience can help us obtain manufacturer approval for acquisitions we seek, we may not necessarily be able to make all


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acquisitions we otherwise would want to make. See “Risk Factors—Automotive Retail Risks—Failure to Acquire Dealerships & Successfully Integrate Them Into our Business.”

Recession Resilient Given the size of the franchised auto dealer industry, manufacturers need to maintain production at consistent and predictable levels. As a result, they must implement strategic incentives to encourage and enable dealers to maintain sales levels regardless of market conditions. These incentives allow dealers to lower the cost of sale to the consumer and thereby drive more business while maintaining a profit on the sale. These incentives may come in several forms, from overall volume bonuses, special incentives to sell particular low volume vehicles, and incentives for customer satisfaction and retention rates. While most manufacturers offer incentive programs as part of their normal business operation, incentives can become even more aggressive during an economic downturn in order to support and stabilize sales volume. The dealership franchise model is the single outlet for auto manufacturers and the best dealers can take advantage of these enhanced incentive opportunities during challenging economic conditions.

In addition, a single automotive dealership consists of multiple streams of revenue that we believe provide insulation during an economic downturn. These revenue streams include new and used vehicle sales, service and parts sales (“fixed operations”), and finance and insurance product sales. Fixed operations have consistently higher profit margins that can be leveraged as consumers hold onto vehicles longer. By maintaining and increasing revenues in fixed operations, as well as increasing used vehicle sales and continuing the high profit margin finance and insurance product sales, a dealership can continue to be profitable during challenging times. The chart below summarizes these diverse income sources (on an unaudited basis) derived from dealerships in which GPB’s sponsored entities have interests.

Proven Management Teams GPB has teamed up with automotive industry specialists who have proven track records of success in owning and operating automotive dealerships. They bring their vast network of long-standing relationships to the strategy, giving GPB a distinct advantage. Through this network, we may have the ability to acquire potentially high performing dealerships with top management teams. Our goal is to keep these existing, proven management teams in place upon acquisition and incentivize them to keep all interests aligned with GPB and the Company. In addition to these strong management teams, GPB’s operational experts will serve as officers and/or directors of the Portfolio Company, taking a hands-on approach to the management and operation of the Portfolio Company.


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—Technology-Enabled Services— Market Opportunity We live in an environment where the Internet and its associated media are accessible and immediate, where people and businesses communicate with each other instantly, and where machines are connected with each other across time zones and geographies. Widespread adoption of information and communication technologies has fundamentally changed the nature of the global economy and the way people live and work; the influence of the technology industry is simply present everywhere and in every facet of our daily lives on a global scale.

Within the greater technology space, Technology-Enabled Services are critical to managing and monitoring this broad base of connected devices and applications. Technology-Enabled Service companies provide technology services for corporate networks, as well as connectivity, security, and general technology support. Technology support services range from offsite IT infrastructure management to fully outsourced IT services and support systems. In many cases, these services are provided for a fixed recurring monthly fee. We believe this space will continue to experience growth as companies of all sizes look to reduce technology infrastructure maintenance costs by outsourcing the functions to Technology-Enabled Services providers.

CompTIA’s (Computing Technology Industry Association) consensus forecast projects a 2018 growth rate of 4%+ for the global IT industry, a notable increase over the 3.5% average growth rate of the prior six years. According to Gartner, Inc., the global IT Services market is projected to reach $1.1 trillion by 2021. Within the larger Technology-Enabled Services industry, GPB intends to focus on Portfolio Companies primarily in the Healthcare Technologies, Cyber & Data Security, and Automation subsectors, although we may consider additional subsectors of the Technology-Enabled Services industry that meet our general investment criteria.

Healthcare Technologies – Leverage emerging technologies to deliver more cost-effective healthcare solutions

With an aging demographic causing care delivery costs to increase, combined with shortages of skilled workers, health systems are seeking innovate new ways to deliver medical expertise to their patients and clinicians in the new economy, either by establishing internal departments with a focus on healthcare technologies or by utilizing services provided by external specialized groups. GPB’s Healthcare Technologies strategy will seek out these specialized groups, as well as internal departments of health systems that can be spun off, to be converted into efficient standalone organizations. Targeted segments include electronic health records, telemedicine, virtual care, and interoperability in all facets of healthcare.

Cyber & Data Security – Decrease the likelihood critical data becomes compromised by aggressively managing it.

The frequency of cyber-attacks, ransomware, and intellectual property theft are increasing at a rapid pace due to more data being moved into the cloud, while at the same time hiring staff with the necessary information security expertise remains very challenging and costly. Our Cyber & Data Security strategy not only encompasses prevention-focused companies (perimeter protection and encryption) but also those with rapid crisis response (disaster and data recovery) and risk management expertise to address multiple facets of a continuously changing threat. This strategy includes cyber security tools for data centers, crisis response companies, intrusion detection, optimized hosting services, and potentially insurance products paired with Technology-Enabled Services.

Automation - Transform business performance through process automation and digital labor

Previous efforts to reduce the cost of business processes include the introduction of software-driven workflows and the outsourcing of work to cheaper labor markets. This investment strategy seeks companies that reduce the need for human intervention in core business activities through machine learning, computerized agents, or business logic engines that can reduce costs and improve process


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efficiencies. The strategy includes companies in financial and legal services, as well as a broad number of other industries.

Acquisition Strategy Within the Technology-Enabled Services industry, GPB is focused on acquiring and operating Portfolio Companies that are currently serving small to medium sized businesses (“SMB”) and middle-market businesses locally, regionally and nationwide. We will seek out Portfolio Companies that have well-developed sales and marketing strategies in order to efficiently acquire clients seeking Technology-Enabled Services, along with offering full customer, operations and administrational support. It is currently estimated that over 4,100 such companies exist in the U.S. that service the SMB markets.11

GPB’s strategy includes acquiring and operating a series of platform Portfolio Companies that provide an ideal foundation for follow-on acquisitions which are “bolted-on” to the platform. This may be an effective way to aggregate a customer base, develop technological and administrative synergies, and to produce economies of scale and efficiencies otherwise unobtainable. Such follow-on acquisitions could also allow individual Technology-Enabled Services companies to potentially broaden their customer base and service offerings, opening up new income streams. GPB believes that it and its platform Portfolio Companies will be able to add value to the target acquisitions and improve operating margins by increasing real revenues, improving margins, and adding planned efficiency measures to operations. The key elements to the strategy are:

High, Sustainable Current Cash Flow and Proven Operators The Technology-Enabled Services industry typically focuses on a customer base that represents a high percentage of monthly recurring revenue (“MRR”). Simply put, once a client has formed a relationship with a service provider, they tend to remain with that provider through multi-year renewable contracts. Both contracts and revenue tend to be “sticky” due to the significant amount of resources required to switch providers, implement new systems, gain familiarity, etc. Since GPB intends to acquire and operate companies that have a proven track record of success in their industry, we may be able to tap into these recurring and sticky revenue streams to provide a consistent and highly predictable stream of cash-flow back to the Company through operational profits generated at the Portfolio Company level.

Further, the intention of GPB is to leverage strengths across our portfolio. As acquisitions are completed, it may be possible to share skill sets, technology, and resources across the portfolio, which may increase profit margins and additional unforeseen income streams not yet in place via value-add industry expertise that will be brought to bear. GPB will seek to streamline operations and organically grow revenues of

11 Gartner: Forecast: IT Services, Worldwide, 2012-2018, 1Q14


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Technology-Enabled Services Portfolio Companies we acquire.

Barriers to Entry A number of factors create barriers to entry within the Technology-Enabled Services industry that may enable strategic and stable growth within our portfolio. First and foremost, there is a high level of technical expertise required to service the various industries that will be targeted by our Technology-Enabled Services strategy. Customer segments include healthcare, financial services, and legal, to name a few. Each one of these industries has its own set of complex needs that only an expert technology services team can provide efficiently, effectively, profitably, and at scale. Each requires knowledge of the sector itself, as well as a highly developed and effective team of technology professionals with the infrastructure to service their clients.

As more and more companies have looked to outsource their technology, the expectations for these services has grown. Technology-Enabled Services providers are now expected to operate and offer the most advanced hardware and software currently available. Given the speed of technological advancement, this means that Technology-Enabled Services companies need to be constantly upgrading their technology offerings. A reliable source of capital is needed to have the financial means to afford these upgrades. This creates a significant barrier to entry, as many Technology-Enabled Services firms simply do not have access to the level of capital required to stay on the forefront of technology.

Clients of Technology-Enabled Services companies typically sign multi-year contracts. Thus, once a client base is developed for a particular company, it is not easily disrupted. Technology and systems have often been implemented and integrated over a long period of time by clients, and become integral to the operation of the company. Switching costs to the end customer are high, further dis-incentivizing a company from switching technology providers.

Recession ResilienceOnce a Technology-Enabled Services provider is in the budget of a client, they tend to remain in place through multi-year contracts. Often, at this point, technology budgets have been reduced and outsourced, and thus Technology-Enabled Services expense represents only a small percentage of revenue to a client. Therefore, even during an economic slowdown, critical, outsourced technology services are usually not an area ripe for cost-reduction. Furthermore, technology infrastructure and its reliability are business-critical items most companies cannot survive without. Thus, once confidence is established with a provider and a multi-year contract is in place, there may be little incentive for a company to switch. Finally, GPB intends to target Technology-Enabled Services companies focused on serving sectors that have growing markets with high-demand products and services. This may include, by way of example, healthcare, security, and disaster recovery.


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—Special Situations— In addition to acquiring majority voting and/or primary control interests in companies in the Automotive Retail and Technology-Enabled Services sectors, we may pursue opportunities outside those sectors that generally meet GPB’s acquisition criteria. While GPB does not intend to limit the industry sectors, areas of particular interest are Waste Management, Energy, Healthcare, Real Estate and Professional Services. By way of example, acquisitions in the Healthcare industry generally meet GPB’s acquisition criteria. The industry exhibits recession resilient characteristics as a necessity-based sector, tends to demonstrate the ability to provide consistent revenues, and features high barriers to entry, such as stringent government regulation and high fixed costs. We intend to conduct our operations in this target sector so that we will not meet the definition of “investment company” under the 1940 Act. Our acquisition of Special Situations opportunities will likely form a smaller percentage of our portfolio than our Portfolio Company acquisitions in the Automotive Retail and Technology-Enabled Services sectors once fully invested. Additionally, we may elect to pursue certain opportunistic acquisitions as part of our Special Situations strategy that may not adhere to our key criteria. Such acquisitions will form part of our Special Situations strategy; however we do not expect that, once fully invested, such acquisitions will exceed 5% of our overall portfolio on a cost basis.

The Company will invest in the Healthcare industry primarily through investment into Alliance Physical Therapy Partners, LLC (“Alliance”), a holding company affiliated with and currently primarily owned by GPB Holdings II, LP. GPB Holdings II, LP, a GPB sponsored entity, has raised approximately $471,000,000 as of September 2017 and is seeking to raise up to $750,000,000 through its offering. Through its partial ownership of Alliance, the Company will own a pro-rata portion of all assets acquired by GPB Holdings II, LP through Alliance.

The Company intends to invest in the Waste Management industry primarily through GPB Waste Management Holdings, LLC, a holding company affiliated with GPB Waste Management, LP. GPB Waste Management, LP, a GPB sponsored entity, has raised approximately $84,000,000 as of September 2017 and is seeking to raise up to $400,000,000 through its offering. Through its partial ownership of GPB Waste Management Holdings LLC, the Company will own a pro-rata portion of all assets acquired by GPB Waste Management, LP. As of September 2017, GPB Waste Management, LP had acquired eight Portfolio Companies.

—Debt Strategies—

A combination of tight credit and stringent lending criteria has created a large, underserved segment of the debt market that does not have access to capital from traditional lending sources. This has resulted in a decline in lending to businesses and entrepreneurs in the lower middle-market (defined as companies with annual revenues up to $100 million.) We will target this underserved market by making secured loans to small and medium sized businesses primarily located in North America.

Over the five-year period from 2017 to 2021, approximately $435 billion of U.S. middle-market debt will mature, with much of it needing to be refinanced.12 The combination of this “wall of maturity,” new financing that will be required by middle-market businesses, and many traditional lenders pulling out of the space have created an environment in which lenders to middle-market companies have tremendous opportunity. Unlike traditional high-yield debt and syndicated loans, which tend to be highly standardized with little room for negotiation, middle-market lenders are able to structure loans with stronger covenants, more conservative leverage, and better interest coverage13.

12 Middle Market Debt: The Long View: https://www.blackrock.com/institutions/en-us/literature/whitepaper/blk-middle-market-debt-the-longview- july-2016.pdf13 Investing in middle market senior secured loans: https://www.tiaa.org/public/pdf/C23694_Middle_market_loans_primer.pdf


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We intend to conduct our operations in this target sector so that we will not meet the definition of an Investment Company under the 1940 Act. Generally, as Debt Strategies investments mature, we will seek to reinvest proceeds up to 24 months from the date of the close of the Offering to new investment, with the intent to distribute proceeds thereafter subject to the order of priority according to Section 8.3 of the LPA.

GPB will primarily focus on providing short to medium term loans, typically with 12 to 36 month durations, to companies with collateral well in excess of the principal amount of the loan. Debt investments will generally range in size up to $25 million. Target company characteristics include:

Publicly or privately held Asset value (verified by third party valuation report) of at least 1.5x the loan amount Proven Management Teams with a verified track record Verifiable business plan and growth prospects Clear and achievable exit strategy Clear downside management plan in case of default Companies that are seeking a capital partner to:

i. Increase growth ii. Finance strategic acquisitions iii. Invest in R&D iv. Bring a new product to the market v. Obtain bridge financing to a public offering or other form of capitalization

GPB will utilize a variety of terms within its secured debt structures, including but not limited to:

10 - 17% annual interest paid monthly to the Company Original Issue Discount (OID) on the face value of the Note Payment–in-kind (PIK) interest 1 - 2% service fees on structured facilities Prepayment fees if Note paid prior to maturity Exit fees upon maturity of Note Amortization schedule over 1 - 4 years Information rights whereby the Company reports results to us on a continual basis Legal and due diligence fee reimbursement by target company Royalty on net sales of products Participation rights in future debt and equity offerings

Security and Downside Protection In order to provide investors with capital protection, GPB typically structures its debt investments with numerous built in downside protections, including any combination of the following:


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Primarily first lien position, secured by all assets of the Issuer, including intellectual property, inventory, real estate and equipment. We may consider second lien positions when underlying collateral is still in excess of 1.5x the loan amount net of any senior position lien amount.

Deposit account control agreement (DACA) with the borrower, which gives us the ability to take control over the borrower’s bank deposit account

Confession of judgment to avoid lengthy court proceedings in the case of default Collateral agent, which is a financial institution that holds the collateral on behalf of the lender

under a loan agreement as security for performance of the borrower Personal guarantees from the principals of the borrowing firm

Equity Participation GPB will typically negotiate additional equity upside provisions in tandem with debt investments in order to deliver appreciation over time in excess of the yield on our Notes. Equity provisions will typically be structured as no-cost investments, providing the opportunity to increase total return to Debt Strategies positions without additional risk or cost. Typical equity provisions will include:

Optional convertibility of Note into equity at a fixed price Warrant coverage Common stock Downside price protection on conversion price of Note and exercise price of warrants

MANAGEMENT

Overview

We are managed by GPB Capital Holdings, LLC (“GPB” or the “Manager”), a New York-based, alternative asset management firm focusing on acquiring income-producing private companies whose principals are experienced financial, management and accounting professionals with several decades of combined private investment and acquisitions experience. GPB looks to achieve increased cash flow and profitability by acquiring and operating companies possessing strong management teams. GPB provides strategic planning and managerial insight, along with capital, enabling the businesses we own and operate to attain the next stage of development and profitability. Investing in people has served GPB’s principals well.

GPB

David Gentile, Founder and Chief Executive Officer, is responsible for the management of GPB, including the formulation of strategy, oversight of acquisition policy and leadership of the Acquisition Committee. Prior to founding GPB, Mr. Gentile spent 25 years at the Corporate Advisory and Accounting practice of Gentile, Pismeny & Brengel, LLP (“GP&B”) in New York. During his tenure there, he developed and maintained executive level relationships with many of the Firm’s 3,000+ entrepreneurial, corporate executive and high-net-worth clients. During his career at GP&B, Mr. Gentile advised, oversaw, structured or financed over $1B worth of transactions in the private and public markets. Mr. Gentile is acting Chairman and serves on the Board of Directors of AlphaServe Technologies, LLC, Qello Holdings, LLC and QT Ultrasound, LLC.

Macrina Kgil, Managing Partner and Chief Financial Officer, joined GPB in September 2016 and leads GPB’s finance, treasury management, accounting, administration, financial statement preparation, and overall finance infrastructure. Ms. Kgil brings more than 16 years of financial services management and capital markets knowledge to her role at GPB. Prior to joining GPB, she was the Executive Vice President and Chief Financial Officer of OneMain Holdings, Inc., an Indiana-based consumer finance company. Before OneMain, Ms. Kgil held the role of Vice President at Fortress Investment Group, a global investment firm that had $70.2B of assets under management. While at Fortress, she was responsible for heading up financial due diligence for acquisitions, stabilizing base finance functions of newly acquired portfolio companies and leading the effort to take companies public or raise public debt. Ms. Kgil is a certified public accountant in Korea and received a Bachelor of Science in Mineral and Petroleum Engineering from Seoul National University in Seoul, South Korea.

Craig Goos, Managing Partner and Chief Operating Officer, joined GPB in April 2017 and brings over 20 years of wealth management / financial services experience to his role at GPB. Prior to joining GPB, Mr. Goos spent five years as the President & Managing Director of North Capital companies, which includes North Capital Private Securities Corp, a registered broker-dealer, North Capital Inc., a registered investment advisor, and North Capital Investment Technology. At North Capital, he was involved in the management


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and all functional aspects including sales, operations, regulatory and administrative activities. Prior to North Capital, Mr. Goos spent two years at UBS Wealth Management as the Managing Director of Alternative Investments where his group was responsible for approximately $13B in assets. As manager of the Alternative Investment Group, he oversaw the group’s day-to-day activities, including the development of the group’s overall strategy, the implementation of business, financial and operational controls, portfolio oversight of proprietary funds, marketing, client services, portfolio administration and the open architecture platform of third-party products utilized by financial advisors in U.S. wealth management. Prior to UBS, Mr. Goos had various roles within sales, product management and product development at Bear Stearns, Oppenheimer and Morgan Stanley Dean Witter. Mr. Goos received a Bachelor of Arts in General Studies from the University of Northern Iowa and served as First Lieutenant in the Army National Guard.

Manuel Frederico Vianna, Managing Partner, joined GPB in August 2016 after selling Okyanos Cell Therapy, a healthcare services firm that he co-founded and where he was the COO for five years. He had previously worked as CFO of Condusiv Technologies Corporation, a software company formerly known as Diskeeper Corporation, and as President of MLF Investments, an activist hedge fund. He worked for twenty years at the Monitor Group, a professional services firm co-founded by Prof. Michael Porter in Boston, where he started as a management consultant focused on business strategy, new business development and acquisitions, operational restructuring and enhancement of shareholder value in a variety of industries, rising through the ranks to partner and a member of the global executive committee. Later he managed the hedge fund affiliated with the firm and became a leader in the investment division of the Monitor Group, including in the area of private equity. He was a member of the board of directors of the Monitor Group, which has, since his departure, been acquired by Deloitte. Mr. Vianna has a degree in Production Engineering from the Federal University of Rio de Janeiro and an MBA from Harvard Business School.

Acquisition Committee

The Acquisition Committee is currently composed of six members appointed by GPB. GPB may increase or decrease the size of the Acquisition Committee, and nominate and remove Acquisition Committee members at its sole discretion. Acquisition Committee members serve as such under letter agreements with us under which they agree to serve on the Acquisition Committee for automatically renewing one year terms and providing that either party may terminate the relationship at any time, that they will use their best judgment when making recommendations to us, and that they will regularly attend committee meetings.

Authority & Responsibilities

The authority and responsibilities of the Acquisition Committee include:

Understanding our mission and organizational goals and how they underscore and support the objectives of the underlying Portfolio Companies.

Reviewing and advising on proposed Portfolio Company acquisitions based on the consistency, viability and fit of those proposed Portfolio Companies with our acquisition and operational criteria.

Reviewing and voting on Portfolio Company acquisitions and divestitures.

Advisory Committee

We will have an Advisory Committee composed of members who will be appointed by the GP and who will be independent of the GP, GPB and Ascendant (except to the extent a member may be employed by or otherwise affiliated with a member of our Selling Group other than Ascendant).


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Company Structure


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RISK FACTORS An investment in Class B-1 Units involves risks and uncertainties. Potential investors should carefully consider the following risk factors in conjunction with the other information contained in this Memorandum before purchasing Class B-1 Units. The risks discussed in this Memorandum can adversely affect our operations, operating results, financial condition and prospects. This could cause the value of the Class B-1 Units to decline and could cause you to lose part or all of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also harm our operations.

In addition to the risk factors listed below, prospective investors should also consider the risks described under “Certain Tax, ERISA & Regulatory Matters” and elsewhere in this Memorandum. Potential investors should review the risks of this investment with their legal and financial advisors. In addition, there will be occasions when GPB, the Special LP and their affiliates may encounter potential conflicts of interest in connection with us. As a result of these factors, as well as the risks inherent in any investment, there can be no assurance that we will meet our objectives or otherwise be able to successfully carry out our business plan.

General Risks No Operating History. We are a newly formed entity and have no operating results, so investors have a limited basis upon which to evaluate our ability to achieve our business objectives or judge our prospects for success.

No Participation in Management. Investors will not have the opportunity to evaluate the specific merits or risks of any Portfolio Company. Moreover, LPs will not participate in management and are dependent on GPB for management of the Company. An investor in the Class B-1 Units must rely upon GPB’s ability to identify, structure and make acquisitions of companies consistent with our objectives and policies. Notwithstanding any prior operating experience or experience that members of the Acquisition Committee or GPB affiliates may have in acquiring and operating the Portfolio Companies we expect to focus on, any such prior experience was obtained under different market conditions and under a different organizational structure. There can be no assurance that members of the Acquisition Committee or GPB affiliates will be able to duplicate prior success or that we will achieve our objectives or achieve positive results of any kind.

Expenses will be Significant. We will be obligated to pay fees, and substantial administrative, travel, accounting, tax and legal expenses and certain salaries of employees of GPB regardless of whether we realize revenues. Any use of leverage will increase these fees and charges, and we will need to make substantial profits to avoid depletion of our assets and provide a return to LPs.

Illiquidity of Class B-1 Units. The Class B-1 Units are highly illiquid, have no public market and are generally not transferable except with the GP’s prior consent. Voluntary withdrawals of LPs or redemptions of Class B-1 Units are not permitted without the GP’s consent and are otherwise subject to the terms of the LPA. Each investor will be required to represent that he/ she is acquiring the Class B-1 Units for investment and not with a view to distribution or resale, that such investor understands the Class B-1 Units are not freely transferable and, in any event, that such investor must bear the economic risk of investment for an indefinite period of time. The Class B-1 Units have not been registered under the 1933 Act or applicable state “Blue Sky” securities laws, and the Class B-1 Units cannot be sold unless they are subsequently registered or an exemption from such registration is available. Investors cannot expect to be able to liquidate their investment in case of an emergency.

Competition. We expect to encounter intense competition from other entities making similar acquisitions of businesses or investments in Debt Strategies and Special Situations, including Other GPB Entities, venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe that there are numerous potential Portfolio Companies that we could acquire with the net proceeds of this Offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating an acquisition.

Portfolio Company Competition Risks. We expect that our Portfolio Companies will compete with other companies in their respective businesses. We expect to focus on Control Positions in the Automotive Retail and Technology-Enabled Services sectors and companies in other sectors with strong management,


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earnings and market share. These industries are rapidly evolving and may become more competitive. While we believe acquisitions in these areas offer the opportunity for current yield through strong cash flows that may increase over time, such acquisitions also involve a high degree of risk. As is typical in rapidly evolving industries, demand and market acceptance for new products and services are subject to a high degree of uncertainty. In addition, while many companies in these sectors have grown or have the potential to grow, there is no guarantee of the same in the future. Portfolio Companies may have histories of net losses and may continue to have net losses for years after our acquisition. There can be no assurance that we will be able to make acquisitions on attractive terms or operate Portfolio Companies profitably. To the extent we consummate acquisitions, we may be affected by numerous risks inherent in the businesses we acquire. For example, if we purchase a financially unstable business or an entity lacking an established record of sales or earnings, we will be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although GPB endeavors to evaluate the risks inherent in a particular target business, we cannot assure investors that GPB will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a Portfolio Company.

No Assurance of Confidentiality. As part of the subscription process and otherwise in their capacity as LPs, investors will provide significant amounts of information about themselves to GPB and/or the GP and us. Under the terms of the LPA as well as applicable laws, such information may be made available to other LPs, third parties that have dealings with us and governmental authorities (including by means of securities law-required information statements that are open to public inspection). Investors that are highly sensitive to such issues should consider taking steps to mitigate the impact upon them of such disclosures (such as by investing in us through an intermediary entity). GPB will endeavor to take all reasonable steps under the law and within its obligations described herein to maintain confidentiality.

Litigation Risks. We and Portfolio Companies will be subject to a variety of litigation risks. Under most circumstances, we will indemnify the GP, GPB, and their respective principals and representatives for any costs they may incur in connection with such disputes. The officers, directors and representatives of the Portfolio Companies (which will include our personnel or persons affiliated with GPB) will be similarly indemnified by such entities. Beyond direct costs, such disputes may adversely affect us or our Portfolio Companies in a variety of ways, including by distracting GPB and/or the officers, directors and representatives of such entities and harming relationships between such entities and the Portfolio Companies as well as active or potential investors, other potential sources of capital, and other entities important to the success of the Portfolio Companies. In connection with the disposition of a Portfolio Company, we may be required to make representations about the business and financial affairs of the Portfolio Company typical of those made in connection with the sale of any business, and may be responsible for the content of disclosure documents under applicable securities laws. These arrangements may result in the contingent liabilities, for which the GP may establish reserves and escrows. In that regard, distributions may be delayed or withheld until such reserve is no longer needed or the escrow period expires. Such liabilities might ultimately have to be funded by Limited Partners to the extent that the investors have received prior distributions from us.

Limited Access to Information. Although GPB generally provides access to material and substantive information concerning us, the rights of LPs to information regarding us and our Portfolio Companies will be limited—even if the Units are registered under the 1934 Act and we publicly report thereunder. In particular, GPB will likely obtain certain types of material information that will not be disclosed to LPs. For example, GPB may obtain information regarding Portfolio Companies that is material to determining the value of such assets. Such information may be withheld from LPs in order to comply with duties or otherwise to protect the interests of other parties or us.

Decisions by GPB to withhold information may have adverse consequences for LPs in a variety of circumstances. For example, a Limited Partner that seeks to sell his / her Class B-1 Units may have difficulty in determining an appropriate price for such Class B-1 Units. Even though the Company has been structured to align the interests of GPB and LPs, decisions to withhold information may also make it difficult for LPs to subject GPB to rigorous oversight.

Exculpation & Indemnification. The LPA contains provisions that relieve the GP, GPB, the tax matters partner or partnership representative, their respective affiliates and employees and other related persons, members of the Acquisition Committee and Advisory Committee (collectively, the “Indemnified Persons”) of liability for certain improper acts or omissions. For example, the Indemnified Persons will not be liable to the Limited Partners or us for acts or omissions that constitute ordinary negligence. Under certain circumstances, we may indemnify the Indemnified Persons against liability to third parties resulting from such improper acts or omissions.


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Furthermore, each of the GP and GPB are structured as a limited liability company, and the owners of each of the GP and GPB generally will not be personally liable for each such entity’s debts and obligations. In consequence, LPs will have no recourse to the personal assets of the owners of the GP or GPB even if either entity breaches a duty to the Limited Partners or us.

Legal Counsel. Documents relating to the Company, including the Subscription Documents to be completed by each investor, as well as the LPA, are detailed and often technical in nature. Our legal counsel represents our interests and will not represent the interests of any Investor. Accordingly, each prospective Investor is urged to consult with its own legal counsel before investing in the Company. Our legal counsel also represents GPB and various affiliates. The interests of GPB and its affiliates may become adverse to ours in the future. Under legal ethics rules, our legal counsel may be precluded from representing us due to any conflict of interest between us and GPB and its affiliates.

Valuation Risk. Under the Offering, LPs will be joining the Company up until December 31, 2020 unless further extended by the GP under the terms of the LPA. The Units will be sold at the same Offering Price Per Unit (i.e. $50,000) throughout the Offering, regardless of any changes in the net asset value of the Company or the Redemption Price Per Unit. The amounts to be paid by LPs admitted to the Company after the initial date upon which LPs were admitted to the Company (the “Initial Closing”) will be the Offering Price Per Unit and may not be equivalent to the returns of the Company over the period from the Initial Closing to their admission. There will be no separate net or other asset valuation of the Company’s assets at the time of any such admission of LPs for the purposes of evaluating the amount to be paid by any such LP at such admission. Therefore, the Offering Price Per Unit may be higher or lower than the price per Unit would be if such price were derived from the net asset value of the Company at the time an LP is admitted to the Company. Because the Offering Price per Unit will remain constant throughout the Offering, Units may be diluted as additional Units are issued at the Offering Price Per Unit if the Company’s net asset value increases after the date an LP is admitted to the Company. Any adjustment to the Redemption Price Per Unit (as defined in “Summary of the LPA – Limited Redemption Rights”) will not modify the Offering Price Per Unit. There can be no assurance that the amount of proceeds received by an LP in connection with a transfer, redemption or sale will equal the Offering Price Per Unit, and an investment in the Company entails a risk of complete loss.

Side Letters. Subject to the terms of the LPA, the Company may enter into agreements (“side letters”) with certain prospective or existing LPs whereby such LPs may be subject to terms and conditions (whether economic, procedural or otherwise) that are more advantageous or otherwise different than those set forth in this Memorandum. For example (and without limitation), such agreements may provide for waiver of minimum Capital Commitments (if any), special rights to additional information about the Company (including portfolio information), redemption rights, modification of the Managerial Assistance Fee, Selling Fee, Acquisition Fee, Organizational Expenses, or other expenses borne by such LPs, priority co-investment participation rights, consent rights with respect to certain amendments to documents that govern such LPs’ rights and obligations and those of the Company, the right to transfer Units, the ability to invest in different classes or sub-classes of Units, the right to disclose certain information to underlying investors or to the public, structuring rights with respect to certain types of investments, indemnification and other obligations under the LPA, and reduced or rebated Partnership Expenses. Such modifications are made solely at our discretion of the GP and may, among other things, be based on a LP’s actual or anticipated level of involvement in the Manager’s investment and other activities, the size of a LP’s commitment in the Company. Such arrangements will generally not be disclosed to some or all other LP unless otherwise determined by the GP. The other LPs will have no recourse against the Company, the GP, the Manager or their respective affiliates in the event that certain LPs receive additional or different rights or terms pursuant to such side letters. In addition, the Company may issue an unlimited amount of Units and classes of Units without notice to any Limited Partner, as the General Partner may from time-to-time create and issue, with such rights, designations and obligations as the General Partner may specify.

General Investment Risks General Acquisition Risks. Our success depends on GPB’s ability to implement its acquisition and operational management strategy for us. Any factor that would make it more difficult to execute timely acquisitions, such as a significant reduction of liquidity in a particular market, or any factor that negatively affects the operational profitability of our Portfolio Companies, may also be detrimental to profitability. No assurance can be given that our strategies will be successful under all or any market conditions.

No Assurance of Distributions. The process of identifying, screening and successfully acquiring and operating private companies is difficult and risky. We can provide no assurances that we will be able to generate operating cash flow sufficient to make distributions to LPs. Thus, there is no guarantee that we will pay any particular amount of distributions, if at all. Furthermore, while we have no present plans to do so, we could include LPs’ invested capital in amounts we distribute to LPs, which may reduce the amount


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of capital available to acquire and operate Portfolio Companies and make other permitted acquisitions, as well as, negatively impact the value of the LPs’ investments, especially if a substantial portion of our distributions are paid from our LPs’ invested capital.

Risks Associated with Portfolio Companies. Identifying and participating in attractive acquisition opportunities and assisting in the building of successful enterprises are difficult tasks. There is no assurance that the Company or any Portfolio Company will be profitable and there is a substantial risk that our losses and expenses will exceed our income and gains. Any return on investment to the LPs will depend upon successful acquisitions we make and our ability to generate cash flows from the operations of the Portfolio Companies we acquire. There generally will be little or no publicly-available information regarding the status and prospects of the Portfolio Companies. Many acquisition decisions by GPB will be dependent upon its ability to obtain relevant information, and GPB often will be required to make decisions without complete information or in reliance upon information provided by third parties that is impossible or impracticable to verify. The value of each acquisition will depend upon many factors beyond our control. Portfolio Companies may have substantial variations in results from period to period; face intense competition, and experience failures or substantial declines in value at any stage. Portfolio Companies may need substantial additional equity or debt capital to support growth or to achieve or maintain a competitive position. Such capital may not be available on attractive terms, or may not be available at all. Our capital is limited and may not be adequate to protect us from dilution in multiple rounds of financing in connection with our acquisitions and operation of Portfolio Companies.

Acquisition Strategy Risks. Like any strategy, there are risks associated with our target sectors. These include market risk in the Technology-Enabled Services space, whereby companies focused on legal services, healthcare, media and logistics apart from asset management, are not immune to the risks these verticals face. Thus, there is a need to constantly evaluate such risks and develop clear strategies that measure and manage these risks. There are risks emerging from operators who may not be able to run the business both from a personal and business point of view. The aggregation model poses litigation risk. Litigation costs are substantial and could potentially impact a Portfolio Company. There is also a culture integration risk. In the services business, people are critical to success. Cultural integration issues could pose risks to the overall consolidated company.

Failure of a Portfolio Company. Portfolio Companies may fail. We expect to focus our acquisitions in Control Positions in the Automotive Retail and Technology-Enabled Services and other sectors, and it is possible that those segments could suffer more so than other segments. There are no legal requirements as to concentration or diversification imposed on us with respect to the allocation of assets among those or other sectors, such as are imposed on registered investment companies. No assurance can be given that the failure of one or more Portfolio Companies will not have a material adverse effect on us.

Lack of Publicly Available Information Regarding Acquisitions. The interests in the Portfolio Companies will not be offered under registration statements under the 1933 Act. In addition, Portfolio Companies will not be subject to the periodic information and reporting provisions of the 1934 Act. Accordingly, publicly-available information about Portfolio Companies may be limited. We will be required to rely on the ability of GPB to obtain adequate information to evaluate the potential operational returns from acquiring these companies. If GPB is unable to uncover all material information about Portfolio Companies, it may not make a fully informed acquisition decision, and we may lose some or all of our capital on such acquisitions.

Risks Related to Acquiring and Operating Portfolio Companies. We expect to acquire and operate companies with smaller market capitalizations. Acquisitions of small- and medium-capitalization companies involve significantly greater risks than acquisitions of larger, better-known companies. There is ordinarily a more limited marketplace for the purchase of interests in smaller, private companies, which may make it difficult to source acquisitions. In addition, the relative illiquidity of interests in privately-held companies generally, and the somewhat greater illiquidity of interests in small- and medium-sized privately-held companies, could make it difficult for us to react to negative economic or political developments. Accordingly, our Investors should have a long-term investment horizon.

Illiquid Holdings & Difficulty of Valuation. We plan to acquire private companies for which no (or only a limited) liquid market exists or that are subject to legal or other restrictions on transfer. While Portfolio Companies will be acquired and operated for the purpose of generating income from operations and will be held indefinitely, we may consider strategic transactions on an opportunistic basis, such as an initial public offering, spin-off of businesses, or sale of a Portfolio Company or a business line. Even if we were required to sell a Portfolio Company, we could be unable to sell assets or to realize what we perceive to be their fair value in the event of a sale. In addition, any sale of a Portfolio Company or our interests therein could take a significant period of time to sell due to market conditions, availability of financing, lack of demand and other conditions. Because there will be no readily available market for the Portfolio Companies, those


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acquisitions cannot be sold quickly and will be difficult to value. Determination of fair values for such companies involves judgments that are not susceptible to substantiation by auditing procedures. Values assigned to Portfolio Companies may not accurately reflect values that may be actually realized if we seek to dispose of them. Accordingly, investors should expect to hold their investments in us for the long-term and realize their returns from cash flows from operations.

Risk Inherent In Portfolio Company Acquisitions. Acquisitions of private companies involve a high degree of risk, including that private companies:

may have limited financial resources and may require substantial amounts of financing that may not be available;

typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;

are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a Portfolio Company and, in turn, on us;

generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position;

may be particularly susceptible to economic slowdowns or recessions and may be unable to repay their loans or meet other obligations during these periods; and

often experience unexpected problems in the areas of product development, manufacturing, marketing, financing, and general management, which, in some cases, cannot be adequately solved.

There can be no assurance of the success of such enterprises.

Follow-on Funding Requirements. Following our initial acquisition of a Portfolio Company, we may be required to make additional capital contributions to the Portfolio Company. Such additional contributions may be necessary to protect our interest in Portfolio Companies that require additional financing to carry out their business plans. There is no assurance that we will make such additional contributions or that we will have the ability to do so. The failure to make additional contributions may impact our ability to realize a meaningful return and may impact the recovery of our contribution.

Financing for Acquisitions. We cannot ascertain the capital requirements for all of our potential acquisitions. If the net proceeds of this Offering prove to be insufficient, either because of the size of the acquisition, the depletion of the available net proceeds in search of a target business, expenses incurred by us, or other reasons, we will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular acquisition, we would be compelled to either restructure the transaction or abandon that particular acquisition and seek an alternative target business candidate. In addition, if we consummate an acquisition, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the Portfolio Companies. GPB and its affiliates are not required to provide any financing in connection with or after an acquisition. If a Portfolio Company is unable to generate sufficient cash flow to meet its obligations, including any debt service obligations for financing, the Portfolio Company may default under its loan obligations, be required to sell assets, obtain additional financing, or alternatively, liquidate, which could have a material adverse effect on our revenue, asset value and ability to pay distributions. If we guarantee any such indebtedness, we could be required to sell assets or obtain additional financing to repay any guaranteed amounts, which could have a material adverse effect on our revenue, asset value and ability to pay distributions.

1934 Act Reporting Requirements. If any class of Units becomes beneficially owned by 2,000 or more persons for purposes of the 1934 Act, we would become subject to the information and reporting requirements of the 1934 Act. Such reporting obligations would entail significant administrative burdens, including legal and accounting costs that could negatively impact our operations and returns to Investors. While Investors would be provided more comprehensive publicly-reported financial and other information about us if we are registered under the 1934 Act, such registration would divert cash and managerial resources from our operations and would therefore reduce our returns to Investors. Two GPB-sponsored offerings will become subject to the registration and reporting requirements under the 1934 Act in 2018.


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Regulation Under the 1940 Act. The Company is not registered and does not intend to register as an investment company under the 1940 Act, and, accordingly, investors in the Company are not accorded the protections of the 1940 Act (which, among other matters, requires most registered investment companies to have a majority of disinterested directors, requires securities held in custody at all times to be segregated and marked to clearly identify the owner of such securities, and regulates the relationship between the investment adviser and the investment company).

Our intention to not operate as an investment company will limit our operations in certain ways. For example, since we are not an investment company we may determine to not acquire or dispose of an asset that we would acquire or dispose if we were an investment company, or we may make an acquisition or disposition at a different time, under different circumstances, or in a different manner than would an investment company. If a court, the SEC, or its staff provides additional precedent or guidance bearing upon our activities and intention to not operate as an investment company, we may be required to adjust our business strategy accordingly. Any additional legal precedent, including guidance from the SEC or its staff, could provide additional flexibility to us, or it could further inhibit our ability to pursue the business strategies we have chosen.

Any regulatory or other developments could subject us to regulation as an investment company could require us to restructure our business operations, sell certain of our assets or abstain from the purchase of certain assets, which could have an adverse effect on our financial condition and results of operations. Registration under the 1940 Act would require us to comply with a variety of substantive requirements that impose, among other things, limitations on capital structure, restrictions on specified investments; restrictions on borrowings and other leverage and prohibitions on transactions with affiliates.

If the SEC or a court of competent jurisdiction were to find that the we are required to have, but in violation of the 1940 Act had failed to, register as an investment company, possible consequences include, but are not limited to, the following: (i) the SEC could apply to a U.S. district court to enjoin the violation; (ii) we could be subject to lawsuits to recover any damages caused by the violation; and (iii) any contract to which we are a party that is made in, or whose performance involves, a violation of the 1940 Act would be unenforceable by any party to the contract unless a court were to find that under the circumstances enforcement would produce a more equitable result than non-enforcement and would not be inconsistent with the purposes of the 1940 Act. Should we be subjected to any or all of the foregoing, our business would be materially and adversely affected.

Regulation Under the Patriot Act. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“Patriot Act”) was enacted in reaction to the terrorist attacks on the World Trade Center and the Pentagon. Title III of the Patriot Act, referred to as the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (“IMLA”), imposes obligations on financial service entities, including companies like us under anti-money laundering (“AML”) provisions. The Treasury Department adopted rules under the Patriot Act implementing the AML provisions. Many entities are required, under the Treasury rules, to implement procedures designed to detect and report suspicious activities that identify transactions that may involve illegal activity. If it is determined that we are required to comply with the AML provisions, we will be required to implement procedures and make reports when necessary. Penalties for not implementing and maintaining effective AML compliance programs could result in prosecution, regulatory enforcement action and adverse publicity for both us and GPB.

Other Regulatory Burdens. We and our Portfolio Companies are subject to laws and regulations enacted by national, regional and local governments. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, acquisitions and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations. In addition, we expect that the Patient Protection and Affordable Care Act will increase any annual employee health care costs that we or our Portfolio Companies fund, and significantly increase the cost of compliance and compliance risk related to offering health care benefits.

Systems Risks. We depend on GPB to develop and implement appropriate systems for our activities. The ability of our systems to accommodate increasing volume could also constrain our ability to manage our portfolio. In addition, certain of GPB’s operations may interface with or depend on systems operated by third parties, and there may be inadequate means to verify the risks or reliability of such third-party systems. These programs or systems may be subject to certain defects, failures or interruptions, including those caused by worms, viruses and power failures. Any such defect or failure could have a material adverse effect on us. Although GPB endeavors to provide sufficient redundancy and back-up for material information related to us, GPB is not liable to us for losses caused by systems failures.


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Inadequate Capital. We intend to acquire companies that we will operate and hold for the long-term. Operating cash flow, if any, generated from our acquisitions may not be sufficient to cover operating expenses. If for any reason our operating reserves are insufficient to fund expenses of the Company or of its Portfolio Companies, we or such Portfolio Companies may seek debt financing, which would accrue interest and would be payable prior to any distributions to equity holders. Such sources or other sources of funding may not be available or may not be available under terms that are acceptable. Any additional financing could ultimately dilute your interest in the Company.

Changes in Environment. Our acquisition program is intended to extend over an indefinite period of time during which the business, economic, political, regulatory, and technology environment within which we will operate Portfolio Companies may undergo substantial changes, some of which may be adverse to us. GPB, on our behalf, will have the exclusive right and authority to determine the manner in which we respond to such changes, and LPs generally will have no right to withdraw from the Company or to demand specific modifications to our operations in consequence thereof.

Leverage. Our acquisitions, directly or indirectly, may be leveraged acquisitions. Utilization of leverage is a speculative technique and involves risks to Investors. While leverage may enhance total returns to Investors, if operating cash flows fail to cover borrowing costs, then returns to the LPs will be lower than if there had been no borrowings. To the extent we utilize leverage in an acquisition, the acquisition will be subject to increased exposure to adverse economic factors such as a significant rise in interest rates, a severe downturn in the economy or deterioration in the condition of such acquisition. In the event of our dissolution, our lenders and holders of its debt securities would receive a distribution of our available assets before distributions to Unit holders. Any new units of limited partnership interest may have a preference over the Units with respect to distributions and upon dissolution, which could further limit our ability to make distributions to Investors. Because our decision to incur debt and issue shares in any future offerings will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or our future debt and equity financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future, including issuing limited partnership interests at a discount to market value. Accordingly, Investors will bear the risk of future offerings reducing the value of their Units, diluting their interest in us.

Undisclosed Strategy. Our acquisition and operational strategies and techniques employed to attempt to reach our goals are proprietary and may not be fully disclosed to potential Investors (or to LPs). As a result, a potential Investor’s decision to invest in us must be made without the benefit of being able to review and analyze our strategies and techniques in their entirety.

Preference of Certain Fees Regardless of Profitability. Certain entities and persons referenced herein are entitled to receive the various fees described herein regardless of whether we or any of our Portfolio Companies, operate at a profit. To the extent that our Portfolio Companies are not generating sufficient revenue to pay the fees, we may have to pay these fees out of other available cash, thus further reducing the amount of cash available for distribution to the LPs or to pay other expenses. Similarly, Portfolio Companies may be required to pay certain fees to GPB or Related Parties for services outlined in this Memorandum whether or not the Portfolio Companies are operating at a profit.

Risks of Senior Debt. Making senior secured loans to private North American companies, including middle-market companies, may be risky. There is a risk that any collateral pledged by Portfolio Companies in which we have taken a security interest may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the Portfolio Company to raise additional capital. To the extent our debt is collateralized by the securities of a Portfolio Company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency. Also, in some circumstances, our security interest may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a Portfolio Company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the debt. Secured debt that is under-collateralized involves a greater risk of loss. The fact that debt is secured does not guarantee that we will receive principal and interest payments according to the debt’s terms, or at all, or that we will be able to collect on the debt should we be forced to enforce our remedies.

Other Senior Debt of Portfolio Companies. Our Portfolio Companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which we invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which we are entitled to receive payments with respect to the debt instruments in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a Portfolio Company, holders of debt instruments ranking senior to our Debt Strategies in that Portfolio Company would typically


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be entitled to receive payment in full before we receive any proceeds. After repaying such senior creditors, such Portfolio Company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt instruments in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant Portfolio Company.

Debt Assets Subordinated to Claims of Other Creditors or Lender Liability Claims. If one of our Portfolio Companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we provided managerial assistance to that Portfolio Company, a bankruptcy court might recharacterize our debt assets and subordinate all or a portion of our claim to that of other creditors. In situations where a bankruptcy carries a high degree of political significance, our legal rights may be subordinated to other creditors. We may also be subject to lender liability claims for actions taken by us with respect to a borrower’s business or in instances where we exercise control over the borrower or render significant managerial assistance.

Control of Portfolio Companies. While we intend to acquire assets of or majority and/or primary control interests in Portfolio Companies, we may not have control to act on all matters without the consent of other investors in these companies. We also may not control our Portfolio Companies for which we act as lender, even though we may have board representation or board observation rights, and our debt agreements with such Portfolio Companies may contain certain restrictive covenants. As a result, we are subject to the risk that a Portfolio Company in which we acquire an ownership stake may make business decisions with which we disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors. Due to the lack of liquidity, we may not be able to dispose of our interests in our Portfolio Companies as readily as we would like or at an appropriate valuation. As a result, a Portfolio Company may make decisions that could decrease the value of our portfolio holdings.

Risks Associated with Changes in Interest Rates. To the extent we make loans, we will be subject to financial market risks, including changes in interest rates. General interest rate fluctuations may have a substantial negative impact on our debt investments and lending opportunities and, accordingly, have a material adverse effect on our objectives and the return realized by our LPs. In addition, an increase in interest rates would make it more expensive to use debt for our financing needs, if any.

Interest rates have recently been at or near historic lows. In the event of a rising interest rate environment, payments under floating rate debt instruments generally would rise and there may be a significant number of issuers of such floating rate debt instruments that would be unable or unwilling to pay such increased interest costs and may otherwise be unable to repay their loans. Debt investments with a floating rate may also decline in value in response to rising interest rates if the interest rates of such debt investments do not rise as much, or as quickly, as market interest rates in general. Similarly, during periods of rising interest rates, fixed rate debt investments may decline in value because the fixed rates of interest paid thereunder may be below market interest rates.

Future Economic Recessions or Downturns. Many of our potential Portfolio Companies may be susceptible to economic slowdowns or recessions (such as the economic downturn that occurred from 2008 through 2009) and may be unable to repay our loans during these periods. Therefore, our non-performing assets are likely to increase, and the value of our portfolio is likely to decrease, during these periods. Adverse economic conditions may also decrease the value of any collateral securing our debt investments. A prolonged recession may further decrease the value of such collateral and result in losses of value in our portfolio and a decrease in our revenues, net income and asset value. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us on terms we deem acceptable. These events could prevent us from increasing the number of loans we can make and harm our operating results. Economic downturns or recessions may also result in a Portfolio Company’s failure to satisfy financial or operating covenants imposed by us or other lenders, which could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its assets representing collateral for its obligations, which could trigger cross defaults under other agreements and jeopardize our Portfolio Company’s ability to meet its obligations under the debt that we hold and the value of any equity securities we own. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting Portfolio Company.

Covenant Breaches. A Portfolio Company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a Portfolio Company’s ability to meet its obligations under the debt or equity securities that we anticipate holding. We


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may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting Portfolio Company.

Leverage of Portfolio Companies. Some of our potential Portfolio Companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

Automotive Retail Risks As discussed elsewhere in this Memorandum, we intend to devote a significant portion of our capital to acquiring and operating retail automotive dealerships (“Dealerships”), which face their own unique set of risks and uncertainties, such as the following.

Adverse Economic Conditions. The Automotive Retail industry, and especially new vehicle unit sales, is influenced by general economic conditions, particularly consumer confidence, the level of personal discretionary spending, interest rates, fuel prices, unemployment rates, credit availability, auto emission and fuel economy standards, the rate of inflation, currency exchange rates, the level of manufacturers’ production capacity, manufacturer incentives and consumers’ reaction to such incentives, intense industry competition, the prospects of war, other international conflicts or terrorist attacks, weather conditions, product quality, affordability and innovation, the number of consumers whose vehicle leases are expiring and the length of consumer loans on existing vehicles. During economic downturns, retail new vehicle sales typically experience periods of decline characterized by oversupply and weak demand. The general economic slowdown, as well as tightening of the credit markets and credit standards, volatility in consumer preference around fuel-efficient vehicles in response to volatile fuel prices and concern about domestic manufacturer viability, has resulted in a difficult business environment. And, as a result, the Automotive Retail industry has periodically experienced a decline in vehicle sales and margins.

Changes in interest rates can significantly impact industry new vehicle sales and vehicle affordability due to the direct relationship between rates and monthly loan payments, a critical factor for many vehicle buyers, and the impact interest rates have on customers’ borrowing capacity and disposable income.

Fuel prices have remained volatile and may continue to affect consumer preferences in connection with the purchase of vehicles. Rising fuel prices may make consumers less likely to purchase larger, more expensive vehicles, such as sports utility vehicles or luxury automobiles and more likely to purchase smaller, less expensive and more fuel-efficient vehicles. Further increases or sharp declines in fuel prices could have a material adverse effect on our business, revenues, cash flows and profitability.

In addition, local economic, competitive and other conditions affect the performance of our Dealerships. Our revenues, cash flows and profitability will depend on general economic conditions and spending habits in those regions of the U.S. where we hold Dealerships.

Our Dealerships May Be Located in a Small Number of Geographic Regions. Our Dealerships may be located in a small number of states. As such, our Dealership operations may be adversely affected by economic conditions in a relatively small number of regions in the country.

Natural Disasters & Adverse Weather Events. Part of our acquisition strategy is to acquire income-producing Dealerships in North America, where actual or threatened natural disasters and severe weather events (such as hurricanes, earthquakes, fires, landslides, and hail storms) may disrupt our store operations, which may adversely impact our business, results of operations, financial condition, and cash flows. In addition to business interruption, the Automotive Retail business is subject to substantial risk of property loss due to the significant concentration of property values at store locations. Although we will obtain insurance (subject to certain deductibles, limitations, and exclusions), we cannot assure you that we will not be exposed to uninsured or underinsured losses that could have a material adverse effect on our business, financial condition, results of operations, or cash flows.

In addition, natural disasters may adversely impact new vehicle production and the global automotive supply chain. In 2011, the earthquake and tsunami that struck Japan and the flooding in Thailand caused significant production and supply chain disruptions that resulted in significantly reduced new vehicle production and lower new vehicle shipments by Japanese manufacturers. These disruptions also impacted non-Japanese manufacturers that rely on components produced in Japan and/or Thailand.

Property Loss, Business Interruption or Other Liabilities. Our Dealership business will be subject to substantial risk of loss due to the significant concentration of property values, including vehicle and parts


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inventories; claims by employees, customers and third parties for personal injury or property damage; and fines and penalties in connection with alleged violations of regulatory requirements. While we will have insurance for many of these risks, we will retain risk relating to certain of these perils and certain perils are not covered by our insurance. Certain insurers have limited available property coverage in response to the natural catastrophes experienced in recent years. If we experience significant losses that are not covered by our insurance, whether due to adverse weather conditions or otherwise, or we are required to retain a significant portion of a loss, it could have a significant and adverse effect on us.

Conditions in the Credit Markets in the U.S. The last several years’ turmoil in the credit markets has resulted in tighter credit conditions. In the automotive finance market, tight credit conditions have resulted in a decrease in the availability of automotive loans and leases and have led to more stringent lending conditions. As a result, new and used vehicle sales and margins have been adversely impacted. If economic conditions are adverse and the availability of automotive loans and leases becomes limited again, it is possible that vehicle sales and margins could be adversely impacted.

A significant portion of vehicle buyers, particularly in the used car market, finance their vehicle purchases. Sub-prime finance companies have historically provided financing for consumers who, for a variety of reasons, including poor credit histories and lack of a down payment, do not have access to more traditional finance sources. Economic conditions have caused most sub-prime finance companies to tighten their credit standards and this reduction in available credit has adversely affected used vehicle sales and margins. If sub-prime finance companies apply higher standards, if there is any further tightening of credit standards used by sub-prime finance companies, or if there is additional decline in the overall availability of credit in the sub-prime lending market, the ability of these consumers to purchase vehicles could be limited, which could have a material adverse effect on the used car business.

Continued Viability & Overall Success of a Limited Number of Manufacturers. We will be subject to a concentration of risks related with auto manufacturers’ overall operations, including their financial distress, merger, sale or bankruptcy, including potential liquidation. The success of our Dealerships will be dependent on vehicle manufacturers in several key respects. First, we will rely exclusively on the various vehicle manufacturers for new vehicle inventory. Our ability to sell new vehicles will be dependent on a vehicle manufacturer’s ability to produce and allocate to our Dealerships an attractive, high quality, and desirable product mix at the right time in order to satisfy customer demand. Second, manufacturers generally support their franchisees by providing direct financial assistance in various areas, including, among others, floor plan assistance and advertising assistance. Third, manufacturers provide product warranties and, in some cases, service contracts to customers. To the extent our Dealerships perform warranty and service contract work for vehicles under manufacturer product warranties and service contracts, the Dealerships will direct bill the manufacturer as opposed to invoicing the customer. At any particular time, Dealerships will have significant receivables from manufacturers for warranty and service work performed for customers, as well as for vehicle incentives. In addition, our Dealerships will rely on manufacturers to varying extents for original equipment manufactured replacement parts, training, product brochures and point of sale materials, and other items.

Vehicle manufacturers may be adversely impacted by economic downturns or recessions, significant declines in the sales of their new vehicles, increases in interest rates, adverse fluctuations in currency exchange rates, declines in their credit ratings, reductions in access to capital or credit labor strikes or similar disruptions (including within their major suppliers), supply shortages or rising raw material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products (including due to bankruptcy), product defects, vehicle recall campaigns, litigation, poor product mix or unappealing vehicle design, governmental laws and regulations, or other adverse events. These and other risks could materially adversely affect any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could materially adversely affect our business, results of operations, financial condition, LPs’ equity, cash flows and prospects. During the recent economic downturn, vehicle manufacturers and in particular domestic manufacturers, were adversely impacted by the unfavorable economic conditions in the United States.

Vehicle manufacturers are subject to federal fuel economy requirements, which will increase substantially as a result of a new national program being implemented by the U.S. government to regulate greenhouse gases and fuel economy standards. These new requirements could materially adversely affect the ability of manufacturers to produce, and our ability to sell, vehicles in demand by consumers at affordable prices, which could materially adversely impact our Dealership business.

Our Dealership business could also be materially adversely impacted by another bankruptcy of a major vehicle manufacturer or related lender. For example,


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a manufacturer in bankruptcy could attempt to terminate all or certain of our Dealership franchises, in which case we may not receive adequate compensation for our franchises;

consumer demand for such manufacturer’s products could be materially adversely affected;

a lender in bankruptcy could attempt to terminate our floor plan financing and demand repayment of any amounts outstanding;

we may be unable to arrange financing for our customers for their vehicle purchases and leases through such lender, in which case we would be required to seek financing with alternate financing sources, which may be difficult to obtain on similar terms, if at all;

we may be unable to collect some or all of our significant receivables that are due from such manufacturer or lender, and we may be subject to preference claims relating to payments made by such manufacturer or lender prior to bankruptcy; and

such manufacturer may be relieved of its indemnification obligations with respect to product liability claims.

Additionally, any such bankruptcy may result in us being required to incur impairment charges with respect to the inventory, fixed assets, and intangible assets related to certain franchises, which could adversely impact our results of operations, financial condition, and our ability to remain in compliance with the financial ratios contained in our debt agreements. Tens of billions of dollars of U.S. government support were provided to Chrysler, General Motors, and Ally Financial (formerly known as GMAC). There can be no assurance that U.S. government support will be provided to the same extent or at all in the event of another bankruptcy of a major vehicle manufacturer or related lender. As a result, the potential adverse impact on our financial condition and results of operations could be relatively worse in a manufacturer or related lender bankruptcy which is not financially supported by the U.S. government.

Franchise Agreement Renewals. It is likely that the Dealerships we acquire will operate under franchise agreements with one of our manufacturers (or authorized distributors). Without a franchise agreement, Dealerships cannot obtain new vehicles from a manufacturer, receive floor plan and advertising assistance, perform warranty-related services or purchase parts at manufacturer pricing. As a result, Dealerships are significantly dependent on relationships with these manufacturers, which exercise a great degree of influence over their operations through the franchise agreements. For instance, manufacturers have to approve all purchases and sales of dealerships. Franchise agreements may be terminated or not renewed by the manufacturer for a variety of reasons, including any unapproved changes of ownership or management and other material breaches of the franchise agreements. We cannot guarantee all of the franchise agreements that our Dealerships will be party to will be renewed or that the terms of the renewals will be as favorable to agreements in place when we acquire the Dealership. Further, the failure by us or a Holding Company to maintain franchise agreements with one manufacturer may prohibit us from obtaining franchise agreements with the same manufacturer or impede our ability to obtain and maintain franchise agreements with other manufacturers. In addition, actions taken by manufacturers to exploit their bargaining position in negotiating the terms of renewals of franchise agreements could also have a material adverse effect on revenues and profitability. Our future results of operations may be materially and adversely affected to the extent that franchise rights that our Dealerships enjoy become compromised or operations restricted due to the terms of franchise agreements.

Franchise agreements often do not give a Dealership the exclusive right to sell a manufacturer’s product within a given geographic area. Subject to state laws that are generally designed to protect dealers, a manufacturer may grant another dealer a franchise to start a new dealership near the location of one of the Dealerships, or an existing dealership may move its dealership to a location that would more directly compete against one of our Dealerships. The location of new dealerships near existing dealerships could materially adversely affect operations and reduce the profitability of our Dealerships.

Failure to Meet Manufacturers’ Consumer Satisfaction Requirements. Many manufacturers measure customers’ satisfaction with their sales and warranty service experiences through systems that are generally known as customer satisfaction indices, or CSI. Manufacturers sometimes use a dealership’s CSI scores as a factor in evaluating applications for additional dealership acquisitions. A manufacturer may refuse to consent to a franchise acquisition by us if our dealerships do not meet their CSI standards. This could materially adversely affect our acquisition strategy. In addition, because we receive incentive payments from the manufacturers based in part on CSI scores, future payments could be materially reduced or eliminated if our CSI scores decline.

Failure to Acquire Dealerships & Successfully Integrate Them Into our Business. Growth in our revenues and earnings will depend on our ability to acquire Dealerships and successfully integrate those


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Dealerships into our operations. We cannot guarantee that we will be able to identify and acquire Dealerships—some manufacturers may not approve acquirers with our structure, and our ability to acquire Dealerships would be impaired if we or a Holding Company were denied manufacturer approval. Similarly, if we or a Holding Company acquired a Dealership and the manufacturer later terminated the ownership, such termination could materially impair our ability to acquire other Dealerships of that manufacturer or potentially other manufacturers. In addition, we cannot guarantee that any acquisitions will be successful. Restrictions by our manufacturers, as well as covenants contained in our debt instruments, may directly or indirectly limit our ability to acquire Dealerships. In addition, increased competition for acquisitions may develop, which could result in fewer acquisition opportunities available to us and/or higher acquisition prices. Some of our competitors may have greater financial resources than us.

We will need substantial capital in order to acquire Dealerships. We currently intend to finance acquisitions by using Offering proceeds and borrowings for real property purchases and working capital. While it has improved recently, access to funding through the debt capital markets could become challenging again in the future. Also, in the recent past, the cost of obtaining money from the credit markets increased as many lenders and institutional investors increased interest rates, enacted tighter lending standards, refused to refinance existing debt as maturity at all or on terms similar to current debt, and reduced and, in some cases, ceased to provide funding to borrowers. Accordingly, our ability to make acquisitions could be adversely affected if our access to capital is limited.

Consumer Incentive & Marketing Programs of Manufacturers. Most vehicle manufacturers from time to time establish various incentive and marketing programs designed to spur consumer demand for their vehicles. These programs will impact our operations, particularly sales of new vehicles. Since these programs are often not announced in advance, they can be difficult to plan for when ordering inventory. Additionally, manufacturers may modify and discontinue these incentive and marketing programs from time to time, which could have a material adverse effect on our results of operations and cash flows.

Substantial Competition in Automotive Sales & Services. The Automotive Retail industry is highly competitive. Depending on the geographic market, our Dealerships will compete with:

franchised automotive dealerships in markets that sell the same or similar makes of new and used vehicles that our Dealerships offer, occasionally at lower prices than our Dealerships;

other national or regional affiliated groups of franchised dealerships and/or of used vehicle dealerships;

private market buyers and sellers of used vehicles;

Internet-based vehicle brokers that sell vehicles obtained from franchised dealers directly to consumers;

service center chain stores; and

independent service and repair shops.

Dealerships will also compete with regional and national vehicle rental companies that sell their used rental vehicles. In addition, automobile manufacturers may directly enter the retail market in the future, which could have a material adverse effect on our Dealerships. Some of our Dealerships’ competitors may have greater financial, marketing and personnel resources and lower overhead and sales costs than our Dealerships have. Our revenues and profitability may be materially and adversely affected if competing dealerships expand their market share or are awarded additional franchises by manufacturers that supply our Dealerships.

In addition to competition for vehicle sales, Dealerships will compete with franchised dealerships to perform warranty repairs and with other automotive dealers, franchised and independent service center chains and independent garages for non-warranty repair and routine maintenance business. Dealerships’ parts operations will compete with other automotive dealers, service stores and auto parts retailers. A number of regional or national chains offer selected parts and services at prices that may be lower than our Dealerships’ prices. Dealerships will also compete with a broad range of financial institutions in arranging financing for customers’ vehicle purchases.

Some automobile manufacturers have acquired in the past, and may attempt to acquire in the future, automotive dealerships in certain states. Our revenues and profitability could be materially adversely affected by the efforts of manufacturers to enter the retail arena.

In addition, the Internet has become a significant part of the advertising and sales process in the automotive industry. Customers are using the Internet as part of the sales process to compare pricing for cars and


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related finance and insurance services and even though we utilize Internet as an important selling and leads generation tool, it may reduce gross profit margins for new and used cars and profits for related finance and insurance services. Some web sites offer vehicles for sale over the Internet without the benefit of having a dealership franchise. If Internet new vehicle sales are allowed to be conducted without the involvement of franchised dealers, or if dealerships are able to effectively use the Internet to sell outside of their markets, our business could be materially adversely affected. We would also be materially adversely affected to the extent that Internet companies acquire dealerships or align themselves with our competitors’ dealerships.

Substantial Regulation. A number of state and federal laws and regulations affect our proposed Dealership business, such as those relating to motor vehicle sales, retail installment sales, leasing, sales of finance, insurance, and vehicle protection products, licensing, consumer protection, consumer privacy, escheatment, anti-money laundering, environmental, vehicle emissions and fuel economy, health and safety, wage-hour, anti-discrimination, and other employment practices. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil, or criminal penalties, the imposition of remedial obligations, such as extensive and expensive product recalls, or the issuance of injunctions limiting or prohibiting operations. In the states in which Dealerships operate, the Dealerships will be required to obtain various licenses in order to operate their businesses, including dealer, sales, finance and insurance-related licenses issued by state authorities. These laws also regulate the conduct of business, including advertising, operating, financing, employment and sales practices. Other laws and regulations include state franchise laws and regulations and other extensive laws and regulations applicable to new and used motor vehicle dealers, as well as various employment practices laws.

Dealerships’ financing activities with customers will be subject to federal truth-in-lending, consumer leasing and equal credit opportunity laws and regulations, as well as state and local motor vehicle finance laws, installment finance laws, insurance laws, usury laws and other installment sales laws and regulations. Claims arising out of actual or alleged violations of law may be asserted against Dealerships by individuals or governmental entities and may expose Dealerships to significant damages or other penalties, including revocation or suspension of licenses to conduct Dealership operations and fines.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) established a new consumer financial protection agency with broad regulatory powers. Although automotive dealers are generally excluded, the Dodd-Frank Act could lead to additional, indirect regulation of automotive dealers through its regulation of automotive finance companies and other financial institutions.

Furthermore, we expect that new laws and regulations, particularly at the federal level, in other areas may be enacted, which could also materially adversely impact our Dealership business. The labor policy of the current administration could lead to increased unionization efforts, which could lead to higher labor costs, disrupt store operations, and reduce our profitability.

Possible penalties for violation of any of these laws or regulations include revocation or suspension of licenses to operate and civil or criminal fines and penalties. In addition, many laws may give customers a private cause of action. Violation of these laws, the cost of compliance with these laws, or changes in these laws could result in adverse financial consequences to our dealerships.

Stringent Federal, State & Local Environmental Laws & Regulations. Dealerships will be subject to a wide range of federal, state and local environmental laws and regulations. As with automotive dealerships generally, and service, parts and body shop operations in particular, the automotive dealership business involves the use, storage, handling and contracting for recycling or disposal of hazardous substances or wastes and other environmentally-sensitive materials. These environmental laws and regulations may impose numerous obligations that are applicable to Dealerships’ operations including the acquisition of permits to conduct regulated activities, the incurrence of capital expenditures to limit or prevent releases of materials from storage tanks and other equipment that they operate, and the imposition of substantial liabilities for pollution resulting from their operations. Numerous governmental authorities, such as the Environmental Protection Agency, and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly actions. Failure to comply with these laws, regulations, and permits may result in the assessment of administrative, civil, and criminal penalties, the imposition of remedial obligations, and the issuance of injunctions limiting or preventing some or all of a Dealership’s operations.

Interest Rate Risk in Connection With Vehicle Floor Plan Payables & any Debt Facility. Most of our projected Dealership debt, including our vehicle floor plan payable, will be subject to variable interest rates. Any variable interest rate debt will fluctuate with changing market conditions and, accordingly, our interest expense on any such debt will increase if interest rates rise. In addition, our net inventory carrying cost (new vehicle floor plan interest expense net of floor plan assistance that we receive from automotive


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manufacturers) may increase due to changes in interest rates, inventory levels, and manufacturer assistance. We cannot assure you that a significant increase in interest rates would not have a material adverse effect on our business, financial condition, results of operations, or cash flows.

Failure of Our Information Systems or Any Security Breach. Our Dealership business will be dependent upon the efficient operation of information systems. In particular, we will rely on information systems to effectively manage our pricing strategy and tools, sales, inventory, and service efforts, the preparation of our consolidated financial and operating data, consumer financing, and customer information. The failure of information systems to perform as designed or the failure to maintain and enhance or protect the integrity of these systems could disrupt our business operations, impact sales and results of operations, expose us to customer or third-party claims, or result in adverse publicity. Additionally, we will collect, process, and retain sensitive and confidential customer information in the normal course of our business. Despite the security measures we plan to have in place and any additional measures we may implement, our facilities and systems, and those of any third-party service providers, could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, human errors, acts of vandalism, or other events. Any security breach or event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information, whether by us directly or any third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business, or otherwise affect our results of operations.

Loss of Key Personnel or Failure to Attract Additional Qualified Personnel. We believe our success will depend to a significant extent upon the efforts and abilities of GPB’s senior management. The unexpected or unanticipated loss of the services of one or more members of GPB’s management team could have an adverse effect on us and impair the efficiency and productivity of our operations, though we will have key man insurance for any of GPB’s key personnel. In addition, the market for qualified employees in the industry and in the regions in which we plan operate, particularly for general managers and sales and service personnel, is highly competitive and may subject us to increased labor costs during periods of low unemployment. Accordingly, the loss of any key employees or the failure to attract qualified managers could have an adverse effect on our business and may impact the ability of Dealerships to conduct their operations in accordance with our national standards.

Technology-Enabled Services Risks The Industry is highly competitive, fragmented and continually evolving. Technology-Enabled Services is a highly competitive and fragmented industry that includes a large number of diverse participants. The market is fragmented, and no company holds a dominant position. Consequently, competition for client requirements and experienced personnel varies significantly by geographic area and by the type of service provided. Some competitors are large and have immense technical, financial, and marketing resources and substantial name recognition. In addition, clients may elect to increase their internal IT systems resources to satisfy their custom software development and integration needs. Finally, the Technology-Enabled Services industry is being impacted by the growing use of lower-cost offshore delivery capabilities (primarily India and other parts of Asia). There can be no assurance that the Technology-Enabled Services Portfolio Companies will be able to continue to compete successfully with existing or future competitors or that future competition will not have a material adverse effect on their results of operations and financial condition.

Increased Competition & Large Customers’ Bargaining Power May Reduce Billing Rates. Certain Technology-Enabled Services companies have experienced reductions in the rates at which they bill some large customers for services due to the highly competitive market conditions that exist at this time. Additionally, many Technology-Enabled Services companies actively compete against other Technology-Enabled Services companies for business at new and existing clients. Billing rate reductions or competitive pressures may lead to a further decline in revenue. If Technology-Enabled Services Portfolio Companies are unable to make commensurate reductions in their personnel costs, their margins and operating results in the future would be adversely affected.

New Products or Services or Changes in Customer Requirements. The success of Technology-Enabled Services companies depends, in part, on their ability to implement and deliver IT solutions or IT services that anticipate and keep pace with rapid and continuing changes in technology, industry standards, and client preferences and requirements. Technology-Enabled Services Portfolio Companies may not be successful in anticipating or responding to these developments on a timely basis, and their offerings may not be successful in the marketplace. Also, services, solutions and technologies developed by competitors may make the solutions or staffing offerings of our Technology-Enabled Services Portfolio Companies uncompetitive or obsolete. Any one of these circumstances could have a material adverse effect on our Technology-Enabled Services Portfolio Companies’ ability to obtain and successfully complete client engagements.


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Cyber-Attacks or Data Breaches. Information security risks for companies providing information technology and professional services, especially in healthcare-related industries, have increased over recent years. This increase in risk may be attributed to the value of personally identifiable information or personal data used for identity theft and fraud, the increasing sophistication and activities of attackers including organized crime, hackers, terrorists, activists, and other third parties, and the reliance on Internet-based communications, and new technologies. Technology-Enabled Services companies’ operations and business rely on the secure processing, transmission, storage and availability of information and resources provided by their information technology environment.

Technology-Enabled Services companies may become the target of cyber-attacks or data breaches caused by external entities, third-party vendors, or a company’s own personnel, either intentionally and unintentionally. These cyber-attacks or data breaches could result in the disruption of IT companies’ internal and customer-facing business operations, and could also result in the unauthorized disclosure, misuse, loss, and destruction of confidential and regulated information, including United States designated personally identifiable information, personal data under the European Union Data Protection Directive, or protected health information under the United States Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

Technology-Enabled Services companies’ failure to protect such information could result in reputational damage, fines and penalties, litigation costs, external investigations, compensation costs including reimbursement and monetary awards, and/or additional compliance costs which could have a material, adverse impact. As the cyber threat landscape continues to evolve, Technology-Enabled Services companies may be required to expend additional resources to enhance existing protective measures or implement new mitigation strategies.

Failure to Maintain State of the Art Technology & Network Equipment. Technology is a critical foundation in Technology-Enabled Services companies operations and service delivery. Technology-Enabled Services companies utilize and deploy internally developed and third-party software across various hardware environments. Their clients are highly dependent upon the high availability and uncompromised security of these systems. The systems are subject to the risk of an extended interruption or outage due to many factors, such as system failures, acts of nature and attacks from third parties. Accordingly, maintenance of and investment in these foundational components are critical to success in the IT industry. If the reliability of Technology-Enabled Services companies’ technology or network operations falls below required service levels, or a systemic fault affects the organization broadly, the companies may be obligated to pay performance penalties to customers, and their business from existing and potential clients may be jeopardized.

Failure to Correctly Price Service Contracts. Our Technology-Enabled Services Portfolio Companies may enter into long-term contracts with customers that are priced based, in part, on forward looking assumptions that may prove incorrect. If such assumptions are inaccurate, or if we otherwise fail to correctly price our customer contracts, particularly those with lengthy contract terms, then our revenue, profitability and overall business operations may suffer. Further, if we fail to anticipate any unexpected increase in our cost of providing services, including the costs for employees, office space or technology, we could be exposed to risks associated with cost overruns related to our required performance under our contracts, which could have a negative effect on our margins and earnings.

Decline in Customer Renewals or Failure to Expand Relationships. In order for us to improve our operating results and grow, it is important that customers of our Technology-Enabled Services Portfolio Companies renew their agreements when the initial contract term expires and that our Portfolio Companies expand their customer relationships to add new market opportunities and related service revenue opportunity under management. Customers of our Technology-Enabled Services Portfolio Companies have no obligation to renew their contracts after the initial terms have expired, and cannot assure you that customers will renew service contracts at the same or higher level of service, if at all. Customer renewal rates may decline or fluctuate as a result of a number of factors, including their satisfaction or dissatisfaction with our Portfolio Companies’ solution and results, pricing, mergers and acquisitions affecting our customers or their end customers, the effects of economic conditions or reductions in our customers’ or their end customers’ spending levels. If our customers do not renew their agreements, renew on less favorable terms or fail to contract with our Technology-Enabled Services Portfolio Companies for additional service revenue management opportunities, our Technology-Enabled Services Portfolio Companies’ revenue may decline and may not realize improved operating results and growth from their customer base.


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Waste Management Risks

Industry Competition. The Waste Management industry is highly competitive and requires substantial labor and capital resources. Some of the markets in which we plan to compete are served by one or more large, national companies, as well as by regional and local companies of varying sizes and resources, some of which may have accumulated substantial goodwill in their markets. Some of our competitors may also be better capitalized than we are, have greater name recognition than we do or be able to provide or be willing to bid their services at a lower price than we may be willing to offer. Our inability to compete effectively could hinder our growth or adversely impact our operating results.

Loss of Contracts. Our contracts will be for specified terms and will be subject to competitive bidding in the future. In addition, some or all of our customers may terminate their contracts with us prior to their scheduled expiration dates. Municipalities may also decide to directly provide services to their residents, on an optional or mandatory basis, which may cause us to lose customers. If we are not able to replace lost revenues resulting from unsuccessful competitive bidding, early termination or the renegotiation of existing contracts with other revenues within a reasonable time period, our results of operations and financial condition could be adversely affected.

Cost Increases and Limitations on Price Increases. We may experience increases in certain of our operating costs that we may not be able to pass on to our customers. For instance, the price and supply of fuel can fluctuate significantly based on international, political and economic circumstances, as well as other factors outside our control, such as actions by the Organization of the Petroleum Exporting Countries and other gas producers, regional production patterns, weather conditions, political instability in oil and gas producing regions and environmental concerns. We rely on fuel to run our collection and transfer trucks and our equipment used in our transfer stations and landfill operations. Supply shortages could substantially increase our operating expenses. Additionally, as fuel prices increase, our direct and indirect operating expenses increase and many of our vendors raise their prices as a means to offset their own rising costs.

To manage our exposure to volatility in fuel prices, we may enter into fuel derivative contracts as a risk management tool to mitigate the potential impact of certain market risks associated with fluctuations in fuel prices; however, because energy prices can fluctuate significantly in a relatively short amount of time, we must also continually monitor and adjust our risk management strategies to address not only fuel price increases, but also fuel price volatility. We may realize losses from these fuel derivative contracts.

Labor expenses constitute another cost category that is expected to be one of the highest costs of our Portfolio Companies and, as a result, relatively small increases in labor costs per employee could materially affect our cost structure. If we fail to attract and retain qualified employees, control our labor costs during periods of declining volumes or recover any increased labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in other areas, our operating margins could suffer.

Disposal and related transportation costs are another significant cost category for us. If we incur increased disposal and related transportation costs to dispose of solid waste and are unable to pass these costs on to our customers, our operating results would suffer.

We will seek to secure price increases necessary to offset higher costs, to maintain or improve operating margins, and to obtain adequate returns on our substantial investments in assets. From time to time, our competitors reduce their prices in an effort to expand their market share. Contractual, general economic or market-specific conditions also may limit our ability to raise prices. For example, a number of our contracts may have price adjustment provisions that are tied to an index such as the consumer price index. Particularly in a weak U.S. economy, our costs may increase in excess of the increase, if any, in the consumer price index. This may continue to be the case even when the U.S. economy recovers because a recovery in the solid waste industry historically has lagged behind a recovery in the general economy. As a result, we may be unable to offset increases in costs, improve our operating margins and obtain adequate investment returns through price increases. Price increases also might cause us to lose volume to lower-cost competitors.

Financial Conditions of our Customers. Some of our customers may suffer financial difficulties affecting their credit risk, which could negatively impact our operating results. Customers experiencing financial difficulties could be unable to pay amounts owed to us in a timely manner or renew contracts with us at previous or increased rates.


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Unknown Liabilities or Risks of Acquisitions. Each Portfolio Company that we acquire may have liabilities or risks that we fail or are unable to discover, or that become more adverse to our business than we anticipated at the time of acquisition. It is possible that the operations or sites we may acquire have liabilities or risks in respect of former or existing operations or properties, or otherwise, which we have not been able to identify and assess through our due diligence investigations. As a successor owner, we may be legally responsible for those liabilities that arise from businesses that we acquire. Even if we obtain legally enforceable representations, warranties and indemnities from the sellers of such businesses, they may not cover the liabilities fully or the sellers may not have sufficient funds to perform their obligations. Some environmental liabilities, even if we do not expressly assume them, may be imposed on us under various regulatory schemes and other applicable laws regardless of whether we caused or contributed to any conditions that result in such liabilities. In addition, our insurance program may not cover such sites and will not cover liabilities associated with some environmental issues that may have existed prior to attachment of coverage. A successful uninsured claim against us could harm our financial condition or operating results. Furthermore, risks or liabilities of which we are unaware or we judge to be not material or remote at the time of acquisition may develop into more serious risks to our business. Any adverse outcome resulting from such risks or liabilities could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position and enterprise value.

Seasonal and Event-Driven Events. Our operating results may vary seasonally with a lower volume of solid waste generated during the late fall, winter and early spring because of decreased construction and demolition activities during the winter months in the United States. Our operations will initially focus on New York and New Jersey markets. Therefore, our business, financial condition and results of operations are susceptible to potentially severe weather conditions affecting this region. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and operational costs. Greater precipitation in the winter increases the weight of collected waste, resulting in higher disposal costs, which are typically calculated on a per ton basis. Certain weather conditions, including severe storms, may result in temporary suspension of our operations, which can significantly impact the operating results of the affected areas. Conversely, weather-related occurrences and other “event-driven” waste projects can boost revenues through heavier weight loads or additional work for a limited time period. These factors impact period-to-period comparisons of financial results.

Judicial, Administrative or Other Third-Party Proceedings. We and/or one or more of our Portfolio Companies may be subject in the normal course of business to judicial, administrative or other third-party proceedings that could interrupt or limit operations, result in adverse judgments, settlements or fines and create negative publicity. Individuals, citizens groups, trade associations, community groups or environmental activists may bring actions against us in connection with our operations that could interrupt or limit the scope of our business. Many of these matters raise difficult and complicated factual and legal issues and are subject to uncertainties and complexities. The timing of the final resolutions to lawsuits, regulatory inquiries, and governmental and other legal proceedings is uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments or other financial obligations. Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation and competitive position.

Multiemployer Pension Plans. Our Portfolio Company acquisitions may participate in a number of trustee-managed multiemployer, defined benefit pension plans for employees who are covered by collective bargaining agreements. Companies participating in multiemployer pension plans make periodic contributions to these plans pursuant to various contractual obligations. In the event that a company withdraws from participation in or otherwise ceases contributing to one of these plans, then applicable law regarding withdrawal liability could require the company to make additional contributions to the plan if it is underfunded. The withdrawal liability that would be paid to any multiemployer plan would depend on the extent of the plan’s funding of vested benefits.

Labor Unions. Labor unions are expected to continually attempt to organize our employees. Certain groups of employees may currently be represented by unions, and our Portfolio Companies may have negotiated collective bargaining agreements with these unions. Additional groups of employees may seek union representation in the future, and, if successful, the negotiation of collective bargaining agreements could divert management attention and result in increased operating expenses and lower net income. If we are unable to negotiate acceptable collective bargaining agreements, our operating expenses could increase significantly as a result of work stoppages, including strikes. Any of these matters could adversely affect our financial condition, results of operations and cash flows.


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Operational and Safety Risks. Provision of waste management services involves risks, such as truck accidents, equipment defects, malfunctions and failures and natural disasters, which could potentially result in releases of hazardous materials, injury or death of employees and others or a need to shut down or reduce operation of our facilities while remedial actions are undertaken. These risks may expose us to potential liability for pollution and other environmental damages, personal injury, loss of life, business interruption and property damage or destruction. While we expect to minimize our exposure to such risks through comprehensive training and compliance programs, as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected.

Insurance Costs. We expect our Portfolio Companies will maintain high deductible insurance policies for automobile, general, employer’s, environmental, directors’ and officers’, employment practices and fiduciary liability as well as for employee group health insurance, property insurance and workers’ compensation. We also expect to carry umbrella policies for certain types of claims to provide excess coverage over the underlying policies and per incident deductibles. The amounts that we will self-insure could cause significant volatility in our operating margins and reported earnings based on the occurrence and claim costs of incidents, accidents, injuries and adverse judgments. Insurance accruals are based on claims filed and estimates of claims incurred but not reported and are developed by our management with assistance from a third-party actuary and a third-party claims administrator. To the extent these estimates are inaccurate, we may recognize substantial additional expenses in future periods that would reduce operating margins and reported earnings. In the event that actions are filed against us that include claims for punitive damages, which are generally excluded from coverage under liability insurance policies, a punitive damage award could have an adverse effect on our earnings in the period in which it occurs. Significant increases in premiums on insurance that we retain also could reduce our margins.

Technology Risks. Waste Management operations are increasingly dependent on technology and, if a Portfolio Company’s technology fails, its business could be adversely affected. Our Portfolio Companies may experience problems with the operation of its information technology systems or the technology systems of third parties on which they rely, as well as the development and deployment of new information technology systems, that could adversely affect, or even temporarily disrupt, all or a portion of our Portfolio Companies’ operations until resolved. Inabilities and delays in implementing new systems can also affect our ability to realize projected or expected cost savings. We expect to implement network security measures; however, information technology could be penetrated by outside parties (such as computer hackers or cyber terrorists) intent on extracting information, corrupting information or disrupting business processes. Such unauthorized access could disrupt our business and could result in a loss of assets or reputational damage. Additionally, any systems failures could impede our ability to timely collect and report financial results in accordance with applicable laws.

Government Regulations. We and our Portfolio Companies will be subject to substantial governmental regulation and failure to comply with these requirements, as well as enforcement actions and litigation arising from an actual or perceived breach of such requirements, could subject us to fines, penalties and judgments, and impose limits on our ability to operate and expand. The Waste Management industry is subject to potential liability and restrictions under environmental laws and regulations, including those relating to the transportation, recycling, treatment, storage and disposal of wastes, discharges of pollutants to air and water, and the remediation of contaminated soil, surface water and groundwater. The Waste Management industry has been and will continue to be subject to regulation, including permitting and related financial assurance requirements, as well as attempts to further regulate the industry, including efforts to regulate the emission of greenhouse gases. Our operations will be subject to a wide range of federal, state and, in some cases, local environmental, odor and noise and land use restrictions. Further restrictions could include:

limitations on siting and constructing new waste disposal, transfer, recycling or processing facilities or on expanding existing facilities;

regulations or levies on collection and disposal prices, rates and volumes; limitations or bans on disposal or transportation of out-of-state waste or certain categories of waste; mandates regarding the management of solid waste, including requirements to recycle, divert or

otherwise process certain waste, recycling and other streams; or limitations or restrictions on the recycling, processing or transformation of waste, recycling and

other streams.

Additionally, regulations establishing extended producer responsibility (“EPR”) are being considered or implemented in many places around the world, including in Canada and the U.S. EPR regulations are


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designed to place either partial or total responsibility on producers to fund the post-use life cycle of the products they create. Along with the funding responsibility, producers may be required to take over management of local recycling programs by taking back their products from end users or managing the collection operations and recycling processing infrastructure. There is no federal law establishing EPR in the U.S. or Canada; however, state, provincial and local governments could, and in some cases have, taken steps to implement EPR regulations. If wide-ranging EPR regulations were adopted, they could have a fundamental impact on the waste, recycling and other streams we expect to manage and how we expect to operate our business, including contract terms and pricing.

Environmental, Health and Safety Laws and Regulations. The operations of our Portfolio Companies are expected to be subject to environmental, health and safety laws and regulations, as well as contractual obligations that may result in significant liabilities. There is risk of incurring significant environmental, health and safety liabilities in the use, treatment, storage, transfer and disposal of waste materials. Under applicable environmental laws and regulations, we could be liable if our operations have a negative impact on human health or cause environmental damage to our properties or to the property of other landowners, particularly as a result of the contamination of air, drinking water or soil. Under current law, we could also be held liable for damage caused by conditions that existed before we acquired the assets or operations involved. This risk is of particular concern as we acquire Portfolio Companies because we may be unsuccessful in identifying and assessing potential liabilities during our due diligence investigations. Further, the counterparties in such transactions may be unable to perform their indemnification obligations owed to us.

In the ordinary course of our business, we may become involved in legal and administrative proceedings relating to land use and environmental laws and regulations. These include proceedings in which:

agencies of federal, state, local or foreign governments seek to impose liability on us under applicable statutes, sometimes involving civil or criminal penalties for violations, or to revoke or deny renewal of a permit we need; or

local communities, citizen groups, landowners or governmental agencies oppose the issuance of a permit or approval we need, allege violations of the permits under which we operate or laws or regulations to which we are subject, or seek to impose liability on us for environmental damage.

We will seek to work with the authorities or other persons involved in these proceedings to resolve any issues raised. If we are not successful, the adverse outcome of one or more of these proceedings could result in, among other things, material increases in our costs or liabilities as well as material impairments to the value of our assets.

Regulation of the Flow of Solid Waste in Interstate Commerce. Future changes in laws or renewed enforcement of laws regulating the flow of solid waste in interstate commerce could adversely affect operating results. Various state and local governments have enacted, or are considering enacting, laws and regulations that restrict the disposal within the jurisdiction of solid waste generated outside the jurisdiction. In addition, some state and local governments have promulgated, or are considering promulgating, laws and regulations which govern the flow of waste generated within their respective jurisdictions. These “flow control” laws and regulations typically require that waste generated within the jurisdiction be directed to specified facilities for disposal or processing, which could limit or prohibit the disposal or processing of waste in transfer stations and landfills of our choosing. Such flow control laws and regulations could also require us to deliver waste collected by us within a particular jurisdiction to specified facilities, which could increase our costs and reduce our revenues. In addition, such laws and regulations could require us to obtain additional costly licenses or authorizations to be deemed an authorized hauler or disposal facility.

Landfill Capping, Closure and Post-Closure Maintenance Costs. We may acquire and operate landfills. Landfill operators are typically required to pay capping, closure and post-closure maintenance costs for all of their landfill sites. Obligations to pay closure or post-closure costs or other contamination-related costs may exceed the amount accrued and reserved and other amounts available from funds or reserves established to pay such costs. In addition, subsequent to the completion or closure of a landfill site, liability may arise for unforeseen environmental issues, which could result in the payment of substantial remediation costs that could adversely affect operating results.

Landfill Operating Permits. We may own or operate active landfills. In the event we acquire landfills, our ability to meet our financial and operating objectives may depend in part on our ability to acquire, lease or renew landfill permits, expand existing landfills and develop new landfill sites. It has become increasingly


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difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management facilities, including landfills and transfer stations. These operating permits often must be renewed several times during the permitted life of a landfill pursuant to a process that is often time-consuming, requires numerous hearings and compliance with zoning, environmental and other requirements, is frequently challenged by special interest and other groups and may result in the denial of a permit or renewal, the award of a permit or renewal for a shorter duration otherwise required by law or the imposition of burdensome terms and conditions that may adversely affect our results of operations. Landfill Greenhouse Gas Emissions. Landfill operations typically emit methane, which is identified as a greenhouse gas (“GHG”). There are a number of legislative and regulatory efforts at the state, regional and federal levels to curtail the emission of GHGs to ameliorate the effect of climate change. On August 3, 2015, the EPA finalized the Clean Power Plan rule, which regulates CO2 emissions from existing power plants, and the Carbon Pollution Standards for new, modified, and reconstructed power plants. Also, on January 14, 2015, the Obama Administration announced the goal of limiting methane emissions via a host of proposed and anticipated regulations directed at the oil and gas industry. On August 18, 2015, the EPA proposed updated methane emissions standards for new and modified oil and gas emissions sources. On August 14, 2015, the EPA proposed updates to its 1996 Emission Guidelines for existing MSW landfills that would further reduce methane emissions, and, in a separate action, the EPA issued a supplemental proposal for reducing methane emissions from new and modified landfills. In the event we acquire and operate landfills, comprehensive federal climate change legislation could impose costs on our operations. In 2010, the EPA published a Prevention of Significant Deterioration (“PSD”) and Title V GHG Tailoring Rule, which expanded the EPA’s federal air permitting authority to include the six GHGs. The rule sets new thresholds for GHG emissions that define when the Clean Air Act of 1970, as amended (the “Clean Air Act”), permits are required. In June 2015, the EPA and the Department of Transportation’s National Highway Traffic Safety Administration proposed a national program that would establish the next phase of GHG emissions and fuel efficiency standards for medium and heavy-duty vehicles. If certain changes to these regulations were enacted, such as lowering the thresholds or the inclusion of biogenic emissions, then the amendments could have an adverse effect on landfill operating costs and cash flows.

Management Risks Reliance on Individual Members of GPB & its Affiliates. We are particularly dependent upon the efforts, experience, contacts and skills of the individual members of GPB, the Acquisition Committee and certain of their affiliates and principals. The loss of any such individual could have a material, adverse effect on us, and such loss could occur at any time due to death, disability, resignation or other reasons. In some cases, we may insure the lives of principals we deem important to our success. There can be no assurance that the individual employees and advisors to GPB will continue to be employed by GPB or that such employees and advisors will continue to function on our behalf. If the services of certain key employees of GPB become unavailable, GPB would need to recruit qualified personnel, which may prove difficult.

Evaluation of Acquisitions. Limited Partners will not be permitted to evaluate Portfolio Company opportunities or relevant business, economic, financial or other information that will be used by GPB in making acquisition decisions.

Changes in Acquisition Strategies. GPB has broad discretion to expand, revise or contract our business without the consent of the Limited Partners. Our acquisition strategies may be altered, without prior approval by, or notice to, the LPs, if GPB determines that such change is in our best interest.

Due Diligence. Even if GPB conducts extensive due diligence on a target business, we cannot assure investors that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in losses. Even if GPB’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with preliminary risk analyses. We expect that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific acquisition, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate the transaction for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire another business.


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Conflicts of InterestGPB’s C-Level Personnel will never be compensated by Portfolio Companies for serving as executive officers of the Portfolio Companies, except to the extent certain C-Level Personnel receive compensation or other remuneration in connection with the provision of Operations Support Services, as described in greater detail in “Company Fees & Expenses – Partnership Expenses”. In addition, Related Parties may have potential or actual conflicts of interest in connection with our activities and acquisitions. Related Parties may serve as officers, directors, accountants, advisors to or managers of Portfolio Companies or other companies (and receive fees or other compensation at market rates from such Portfolio Companies in connection therewith for services which would have otherwise been outsourced). Such other companies may have objectives or may implement strategies similar to ours. For additional information, see “Company Fees & Expenses – Partnership Expenses.”

The acquisition strategies of Other GPB Entities may overlap with one or more of our acquisition strategies. If a potential Portfolio Company acquisition fits the acquisition objective of one or more GPB sponsored entity, the GPB Acquisition Committee will allocate opportunities in good faith and on a basis believed to be fair and equitable, and no GPB sponsored entity shall receive preferential treatment over another. In order to ensure all Portfolio Company acquisitions are allocated fairly, the GPB Acquisition Committee will consider the company’s specific circumstances and adhere to the Allocation Policy. For further discussion on the Allocation Policy, see “Allocation of Opportunities” below.

We will not enter into any Inter-Company Loans.

When a Portfolio Company (or group of Portfolio Companies) in the Automotive Retail sector is acquired by the Company and Other GPB Entities in connection with a joint venture, financing arrangements may carry joint and/or several obligations among the assets of such Portfolio Companies (or among such Portfolio Companies). In such situations, these joint and/or several obligations are generally limited to the specific assets of the Portfolio Companies for which the financing is being utilized.

For further discussion on Related Parties and Conflicts of Interest, see “Related Parties & Conflicts of Interest.”

U.S. Tax Considerations The Company expects to be treated as a partnership for U.S. federal income tax purposes. Each Limited Partner, in determining its U.S. federal income tax liability, will take into account its allocable share of our income, gain, loss, deduction and credits, without regard to whether it has received cash distributions from the Company. The Company may take positions with respect to certain tax issues that depend on legal and other interpretive conclusions.

The Company’s anticipated activities are expected to produce income that is subject to taxation as unrelated business taxable income (“UBTI”) under Sections 512 and 514 of the Code. Certain other special tax considerations may be applicable to U.S. tax-exempt investors investing in the Company.

Potential Limited Partners are urged to review the discussion under the section titled “Certain Tax, ERISA, and Other Regulatory Matters – Certain Tax Matters.” The tax consequences to Limited Partners of an investment in the Class B-1 Units are complex and may differ for each Limited Partner. Accordingly, each prospective Limited Partner is advised to consult its own tax counsel as to the specific tax consequences of an investment in the Class B-1 Units.

The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Company. Prospective Investors should read the entire Memorandum, the LPA, the Subscription Documents, and consult with their own advisers before deciding whether to invest in the Company. In addition, as our investment program develops and changes over time, an investment in the Company may be subject to additional and different risk factors.


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COMPANY FEES & EXPENSES The following table sets forth our best estimate of how we intend to use the gross and net proceeds from the Offering assuming that we sell the maximum offering amount of $1,500,000,000. However, the number of Units to be offered may vary from these assumptions. Class B-1 Units in the offering are being offered on a best efforts basis at $50,000 per Class B-1 Unit.

The table assumes that all of the offering gross proceeds come from sales of Class B-1 Units. The table also assumes that the Servicing Fee is paid in-full on all Units offered. The Servicing Fee may be reduced or eliminated at the discretion of the General Partner and with the consent of any third-party, as applicable. Any reduction in such fees will lead to a corresponding increase in the amount of proceeds available for acquisition, and will not reduce the Offering Price Per Unit paid by the LP. Because amounts in the following table are estimates, they may not accurately reflect the actual receipt or use of the offering proceeds. In particular, the following table assumes that 100% of the offering will be raised by selling Class B-1 Units, which will not be the case. Other share classes of the Company, and individual LPs, may be subject to different fees and expenses. In addition, the amounts below do not reflect Partnership Expenses, the Managerial Assistance Fee, and expenses in respect of In-House Services and Operations Support Services, which, in the aggregate, may be substantial and will reduce the amount of proceeds available for acquisition.

The following table sets forth information about how we intend to use the proceeds raised in this offering, assuming that we sell the maximum offering amount of $1,500,000,000. The figures set forth below cannot be precisely calculated at this time and are presented for illustrative purposes only:

Maximum Offering Size (in millions)

Amount % of Proceeds

Gross Offering Proceeds $1,500.00 100.0%

Less Company Fees & Expenses:

Servicing Fee $6.00 0.4%

Organizational Expenses $18.75 1.25%

Acquisition Fee $26.25 1.75%

Proceeds Available for Acquisition $1,449.00 96.6%

The Company will continue to bear the following fees and expenses:

Servicing Fee: Investors in Class B-1 Units will indirectly pay broker-dealers, certain employees, officers and directors of Ascendant, or other affiliates of the Company an annual servicing fee equal to 0.4% of all Capital Contributions attributable to Class B-1 Units, initially payable upon an investor’s subscription for Class B-1 Units and payable annually for so long as such investor holds an interest in the Company. GPB reserves the right to pay Servicing Fees that are less than or more than the foregoing amount.

Upon acceptance of a Limited Partner’s subscription and continuing annually thereafter, a portion of such Limited Partner’s subscription price will be used to pay the Servicing Fee. The Servicing Fees are in addition to the Partnership Expenses, Managerial Assistance Fees, Acquisition Fees, and Organizational Expenses payable by the Company.

The Servicing Fees are different from the fees and commissions paid by investors in the Class A-1 Units being separately offered by the Company through different distribution channels. Information regarding the fees, commissions and expenses payable by investors in the Class A-1 Units is available from the Company upon request.

Organizational Expenses: All fees, costs and expenses, up to 1.25% of the gross proceeds received by (or expected to be received by) the Company from the Offering, actually incurred by the Company, the GP, its affiliates or a third party, through the final closing of the Company, in connection with the Offering and organization of the Company, any feeder vehicles that invest directly or indirectly in the Company (including any employee vehicles), Parallel Vehicles and/or blocker corporations, and the GP, including (i) the preparation of the LPA and the organizational agreements of such other entities, or any amendment or restatement of the LPA or such other agreements (to the extent prepared in connection with the formation or organization of the Company or any transaction at or in connection with any closing), (ii) the preparation


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of any offering documents, subscription materials and related documents in connection with any Offering, (iii) legal, accounting, filing, consulting and other professional fees and expenses, (iv) a reasonable allocation of time expended by the GP or its affiliates, and their respective employees and representatives, and (v) all other costs and expenses (including travel and entertainment expenses relating to capital raising efforts) actually incurred by the Company, the GP or affiliates thereof (“Organizational Expenses”) will be paid or reimbursed by the Company. Any Organizational Expenses in excess of such amount will be paid by the GP or its affiliates. While the GP is entitled to full reimbursement of Organizational Expenses up to the cap (which is in part based on our expected Offering size), it may defer reimbursements of a portion of Organizational Expenses in its discretion. Additionally, while the GP is entitled to reimbursements based on the expected offering size, if the Company does not raise the full amount of the expected Offering size, the GP will return any such reimbursement amount exceeding 1.25% of the gross proceeds received by the Company in the Offering.

Managerial Assistance Fee: GPB will receive an annualized Managerial Assistance Fee, payable by the Company pursuant to the Managerial Services Agreement, quarterly in advance equal to 2.0% of the Capital Contributions made to the Company for providing managerial assistance and other services to us and the Portfolio Companies. Those services will include conducting our day to day operations as described above, along with providing reports to LPs and other duties delegated to GPB pursuant to the Managerial Services Agreement. The Managerial Assistance Fee does not include expenses related to In-House Services and Operations Support Services (defined below) provided to the Company or its Portfolio Companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee, and any such expenses will be reviewed by the Advisory Committee on an annual basis.

The Managerial Assistance Fee will be paid over time and based on the initial value of LPs’ Capital Contributions. It will not decrease if the value of our acquisitions decreases, nor will it increase if the value of our acquisitions increases.

GPB has the right to assign all or a portion of the Managerial Assistance Fee otherwise payable to GPB, and we will pay such Managerial Assistance Fee, to designated placement agents for services rendered by such placement agents in connection with the Offering, including placement agents that are members of the Selling Group, such as AAS. GPB also has the right to defer, reduce or waive all or a portion of the Managerial Assistance Fee for certain Limited Partners as GPB may determine in its sole discretion (and intends to waive the Managerial Assistance Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company). Neither the Company nor GPB will be required to notify any other Limited Partner if and when GPB determines to defer, reduce or waive any Managerial Assistance Fee for a Limited Partner, nor will the Company or GPB be required to offer the same reduction or waiver to any other Limited Partner.

Acquisition Fee. Upon the consummation of acquisitions of Portfolio Companies, the Company will pay qualified third-parties, including members of the Selling Group (other than persons holding an interest in the Portfolio Company), an Acquisition Fee of 1.75% of the total acquisition cost of the Portfolio Companies. The Acquisition Fee will be paid in consideration of services provided in our Offering, including but not limited to identifying, structuring and providing us with advice on our acquisitions or capital raising efforts. GPB presently anticipates the Company paying Acquisition Fees to Ascendant Alternative Strategies, LLC, of which Ascendant is a branch office, and we may identify other third parties for which we determine such compensation would be appropriate. GPB, in its sole discretion, may defer, reduce or waive the Acquisition Fee with respect to one or more Limited Partners (and intends to waive the Acquisition Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company).

Partnership Expenses. The Company is responsible for and will pay all costs, expenses and charges incurred with respect to the ownership, operation and maintenance of the Company and its assets, as determined by GPB, which includes the following expenses (but does not include the Organizational Expenses): (A) (i) all fees and expenses incurred (including but not limited to any such fees or expenses of or payable to Ascendant) in connection with: (a) the origination, evaluation (including industry analyses and evaluations), investigation, structuring, acquisition, or disposition of Company assets, including appraisals fees, taxes, brokerage fees (including but not limited to the Acquisition Fee and finder’s fees), underwriting commissions and discounts, legal, accounting, investment banking, consulting, information services, professional fees and financing fees (including the repayment of those financings and the costs related to establishing and maintaining a credit facility for the Company) and investment-related travel; (b) the carrying or management of the Company’s assets; (c) communications with partners; (d) any restructuring or amendments to the constituent documents of the Company and any subsidiary or other entity owned by the Company; (e) distributions to partners; (f) In-House Services (as defined below); and (g) Operations Expenses (as defined below); (ii) attorneys’ and accountants’ fees and expenses; (iii) taxes (including margin taxes) and other governmental charges levied against the Company (except to the extent that such taxes or other governmental charges have actually been reimbursed or deemed to have been paid by a


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partner or former partner pursuant to Section 8.5 of the LPA); and (iv) indemnifiable insurance, regulatory or litigation expenses (and damages) of the General Partner and other persons or entities indemnified under the LPA; (B) Managerial Assistance Fees; (C) all fees and expenses incurred in connection with any meetings of the Limited Partners; (D) all fees and expenses incurred in connection with the registration, qualification or exemption of the Company under any applicable federal, state, or local law and all other fees and expenses imposed by any governmental authority with respect to the Company’s operations or assets; (E) all fees and expenses relating to the preparation of financial statements of the Company, the local, state and federal income, franchise, margin and other tax returns of the Company, other regulatory reports and filings of the Company, and all other documents, opinions, appraisals and reports delivered to the Partners; (F) all fees and expenses (including expenses of the “partnership representative”) incurred in connection with any litigation, mediation, arbitration or other legal or tax proceeding involving the Company (including the cost of any investigation and preparation) and the amount of any judgment or settlement paid in connection therewith; (G) all fees and expenses incurred in connection with the collection of amounts due to the Company; (H) all fees and expenses incurred in connection with the winding-up, dissolution and liquidation of the Company; (I) all fees and expenses incurred in connection with transactions that are allocated to the Company but not consummated; and (J) all insurance costs and expenses, and all costs and expenses incurred in connection with any obligations to provide indemnification or contribution to any persons or entities indemnified pursuant to Section Error! Reference source not found. of the LPA, pursuant to any approval of the partners or as a matter of law (collectively, “Partnership Expenses”).

The Company will pay its own operating expenses as further detailed in Section 3.3 and 3.5 of Article 3 of the LPA, attached hereto as Exhibit A. The General Partner is responsible for its or its affiliates’ general and administrative costs and expenses and its day-to-day overhead expenses of managing the Company and is not entitled to be reimbursed by the Company for such expenses other than for the portion of the total compensation of the General Partner’s, its affiliates’ (including Holding Companies), or Ascendant’s officers and employees relating to the time such officers or employees provide In-House Services or Operations Support Services, both as described below, to the Company or its Portfolio Companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee. “In-House Services” include but are not limited to finance, tax, accounting, legal, compliance, IT, HR, investor relations, risk management, operational, administrative and management services to the Company or the Portfolio Companies. For the avoidance of doubt, any Partnership Expenses paid to Ascendant will not reduce any fees otherwise payable to GPB. For additional information on Ascendant, see “The Special LP” above.

In addition, GPB, the Company or its Portfolio Companies will from time-to-time retain and compensate companies and individuals (“Operations Support Providers”), which include affiliates and employees of GPB, and third-party consultants and advisors. The Operations Support Providers provide operational support and consulting services and similar services to, or in connection with, the identification, acquisition, holding and improvement of such Portfolio Companies (“Operations Support Services”). These services may be high level insight or extensive day-to-day roles, and may include support to GPB or Portfolio Companies regarding, among other things, the company’s management and operations (including serving in management positions or participating in determining corporate strategy), the company’s sales/marketing strategy and retail strategy, data intelligence, finance (including generating metrics and reporting and business restructuring), human capital management (including recruiting personnel and determining executive/incentive compensation), information technology, corporate communications, customer service, sustainability, real estate matters and similar operational matters. The nature of the relationship with each such Operations Support Provider and the time devotion requirements of each such Operations Support Provider may vary significantly.

Fees and expenses associated with Operations Support Services (“Operations Expenses”) are generally paid and/or reimbursed by the Company but may be paid or reimbursed by the relevant Portfolio Company. Operations Expenses (including Operations Expenses incurred in connection with an affiliated Operations Support Provider, including GPB employees) will be determined at the discretion of GPB taking into account the particular Operations Support Services, may include an annual fee or retainer, a discretionary bonus, a profits or equity interest in a Portfolio Company or Holding Company or other incentive-based compensation to the Operations Support Provider as well as any expenses incurred with respect to recruiting and hiring Operations Support Providers. Operations Expenses will include the compensation of certain GPB employees relating to the time such employees provide Operations Support Services. The determination of whether a service is an Operations Support Service will be made by GPB, in its sole discretion. Operations Expenses will, from time to time also be incurred in respect of Portfolio Companies prior to the closing of the investment. In the event one or more Operations Support Providers (directly or indirectly) is providing services with respect to both the Company and other GPB sponsored entities, such Operations Expenses will be allocated among the Company and other GPB sponsored entities as determined by GPB, as applicable in a fair and equitable manner. To the extent any such Operations Expenses are payable to any Operations Support Provider that is affiliated with or employed by GPB, such Operations Expenses will


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not reduce any fees otherwise payable to GPB. These payments or reimbursements are in addition to, and not in lieu of, the Managerial Assistance Fee. GPB’s determination as to whether a service is an Operations Support Service, the categorization of any fees and expenses (e.g., as Operations Expenses) and the allocation of such fees and expenses shall be binding on the Company and its investors.

As distinguished from certain of our competitors who may allocate Operations Expenses at the Portfolio Company level, but may have less direct oversight, GPB believes that it is able to maintain a higher degree of operating control over its Portfolio Companies’ operations and finances by employing many of these individuals itself (in lieu of having these individuals employed by the Portfolio Companies or by having independent third parties serve in these roles). It is GPB’s view that the benefits of this structure far outweigh the costs borne by the Company and, indirectly, the Company’s Limited Partners. Given the income oriented nature of our Portfolio Companies, and our desire to pay a monthly distribution to our limited partners, GPB believes that this type of oversight of our Portfolio Companies is critical to our long-term success. We anticipate that Operations Expenses and expenses for In-House Services allocated to the Company will be, on an annual basis, approximately .00575% of the total expected capital raise of the Company ($1,500,000,000), although such amount will be exceeded during the capital raise period of the Company. The Company shall update this Memorandum during 2019 to disclose the actual aggregate Operations Expenses and expenses for In-House Services allocated to the Company during 2018. Such fees are in addition to and not in lieu of the Managerial Assistance Fee charged to the Company.

All expenses in respect of In-House Services and Operations Support Providers will be reviewed by the Advisory Committee on an annual basis.

ALLOCATION OF PROFITS & LOSSES For each Fiscal Period (fiscal quarters or Fiscal Years), Net Profits and Net Losses generally will be allocated to the Limited Partners, including the Special LP and the GP, according to their Capital Accounts in a manner sufficient to cause each Limited Partner’s Capital Account to equal the amounts such Limited Partners would receive upon the liquidation of the Company. Net Profits and Net Losses are determined on an accrual basis of accounting in accordance with GAAP. “Net Profits” or “Net Losses” are our taxable income or loss determined in accordance with the Code, with adjustments provided in the LPA.

RELATED PARTIES & CONFLICTS OF INTEREST Prospective investors should be aware that there may be occasions when GPB and its Related Parties will encounter potential conflicts of interest in connection with our activities. The following discussion enumerates certain potential conflicts of interest that should be carefully evaluated before making an investment in us. The following list is not intended to be an exhaustive list of the potential conflicts. There can be no assurance that GPB will resolve all conflicts of interest in a manner that is favorable to us. By acquiring a Class B-1 Unit, each Limited Partner will be deemed to have acknowledged the existence of any such actual or potential conflicts of interest and to have waived any claim with respect to any liability arising from the existence of any such conflicts of interest.

Related Party Transactions We will not enter into any Related Party Transaction without the approval of all of the members of the Advisory Committee. With respect to Related Party Transactions that are acquisitions, (i) the acquisition must be documented in writing by the General Partner and Advisory Committee as being on terms no less favorable to the Company as could be obtained in a transaction negotiated at arms-length with an Independent Person, (ii) the General Partner must provide the Advisory Committee with an independent valuation of the proposed acquisition, and (iii) the Advisory Committee must determine that the acquisition is in the best interests of the Company. In addition, the General Partner will not cause the Company to purchase an asset from, or sell an asset to, any other accounts, Holding Companies or entities sponsored or managed by GPB (“Other GPB Entities”), except to the extent such transaction (i) is part of a consolidation or “roll up” of Portfolio Companies for the eventual purpose of creating liquidity (each, a “Roll Up Event”) and (ii) complies with the Related Party Transaction conditions set forth above.

Other GPB Activities Although the senior acquisition professionals intend to devote such time as shall be necessary to conduct the business and affairs of the Company, they are also involved in other activities of GPB, including activities of other accounts and entities sponsored and managed by GPB, including Holding Companies (“Other GPB Entities”). Further, GPB and the senior acquisition professionals may in the future organize and manage one or more companies with objectives and acquisition strategies similar to or different than ours. Some of these entities may have interests that conflict with ours.


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Conflicts of interest may arise in allocating time, services, or resources among our activities and those of Other GPB Entities, GPB and its Related Parties. GPB will devote such time as shall be necessary to conduct our business affairs in an appropriate manner. However, GPB will devote the resources necessary to manage Other GPB Entities and other affiliates, and to manage the activities of GPB.

All of the Company’s operational capabilities and personnel are provided by GPB and/or Ascendant, which provide similar resources for its Other GPB Entities. GPB personnel also provide services to Portfolio Companies. Because GPB and/or Ascendant provide all of the Company’s operational capabilities and personnel to multiple GPB sponsored entities, including the Company, GPB attempts to allocate such expenses, including the compensation of its finance, tax, accounting, legal, compliance, HR, IT, investor relations, administrative, operational and management, risk management and other personnel, among its clients fairly and equitably. The personnel expenses of GPB-employed persons who provide services specifically to the Company or Other GPB Entities are not part of the Managerial Assistance Fee and are paid by the Company and other GPB sponsored entities and accounts as allocated by GPB in its reasonable discretion. When allocating expenses, GPB generally fairly and equitably allocates such expenses among the Company and the Other GPB Entities depending on the portion of time its personnel devote to a particular GPB sponsored entity provided, however, that GPB may allocate expenses in a different manner if it believes it is in the best interest of us and the Other GPB Entities.

GPB and its Related Parties are also not precluded from conducting activities unrelated to Other GPB Entities. GPB and its affiliates may, and expect to, receive fees or other compensation from third parties in connection with these acquisition activities and such fees and compensation shall be for the benefit of their own account and not for us. GPB believes that these other activities will not materially interfere with their responsibilities to us. GPB’s C-Level Personnel will not be compensated by the Portfolio Companies for serving as executive officers of the Portfolio Companies.

The Company, either directly or indirectly through one of our Holding Companies or other affiliates, may also enter into incentive compensation arrangements with Operations Support Providers, which we believe are necessary for the success of our investments and ultimately in the best interest of our investors. Such compensation arrangements will reduce the amount of capital available to acquire and operate Portfolio Companies and to make other permitted acquisitions, which may impact the return realized by the LPs on their investment. For additional information, see “Company Fees & Expenses – Partnership Expenses.”

Allocation of Acquisition Opportunities

The acquisition strategies of Other GPB Entities may overlap with one or more of our acquisition strategies. If a potential Portfolio Company acquisition fits the acquisition objective of one or more GPB sponsored entities, the GPB Acquisition Committee will allocate opportunities in good faith and on a basis believed to be fair and equitable, and no company shall receive preferential treatment over another. In order to ensure all Portfolio Company acquisitions are allocated fairly, the GPB Acquisition Committee will consider the company’s specific circumstances, including, but not limited to:

The amount of capital a GPB sponsored entity currently has available, as compared to the total amount of capital each GPB sponsored entity anticipates raising;

The amount of time that has elapsed since the GPB-sponsored entity made its last acquisition;

The extent to which a particular opportunity achieves the stated objectives of the company; and

The extent to which a particular opportunity would complement the GPB-sponsored entity’s sector diversification goals, and, for Automotive Retail assets in particular, the GPB-sponsored entity’s geographic and brand diversification goals.

Furthermore, should an acquisition opportunity be suitable for more than one of the Other GPB Entities, the GPB Acquisition Committee may deem it appropriate at times for companies to joint venture. Such joint ventures may also include the Company and/or Other GPB Entities investing in a GPB-sponsored holding company or other entity; however, in such situations, the Company will not be subject to a “double layer” of Managerial Assistance Fees nor Performance Allocation, but the Company may bear its pro-rata share of the expenses of such GPB-sponsored holding company or other entity. Should the GPB Acquisition Committee recommend a transaction in which more than one GPB sponsored entities joint venture, GPB will not:

Disadvantage one GPB sponsored entity over another GPB sponsored entity;

Pursue the transaction unless each company has the right to participates on the same terms, including the ability of a company to acquire additional interests;


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Recommend one company participate in the joint venture as a method to increase our fees from that or another GPB sponsored entity;

Pursue such transactions as a method to transfer risk from one GPB sponsored entity to another GPB sponsored entity; and

Bring an additional GPB sponsored entity into the transaction for the purpose of reducing another GPB sponsored entity’s transactional costs.

As noted above, all decisions related to this policy must be approved and documented by the GPB Acquisition Committee pursuant to its governing Charter. In addition, to mitigate any potential conflicts of interests, GPB will not sponsor entities with economic structures that are significantly different. A copy of GPB’s Acquisition Allocation Policy is available upon request.

As indicated above, to the extent we identify a prospective desirable acquisition requiring a capital commitment in excess of an amount to which we can commit, we may participate with Other GPB Entities in a joint venture. Subject to the terms of the LPA, GPB may also joint venture with investors (including unrelated parties, Limited Partners and other affiliates or employees of GPB) (collectively, “Joint Venture Partners”). Such Joint Venture Partners may invest on terms other than those applicable to us as our preference will generally be to participate with a priority of earning cash flow and may have interests or requirements that conflict with and adversely impact us (for example, with respect to their liquidity preference, the timing of acquisitions and disposals, or control rights). GPB will generally seek to ensure that we, any Other GPB Entity, GPB, and Joint Venture Partners participate in any joint venture and any related transactions on comparable terms to the extent practicable. Investors should note, however, that this may not be practicable or appropriate in all circumstances and that we may participate in such opportunities on other terms than such parties if GPB deems such participation as being otherwise in our best interests. This may have an adverse impact on us.

The acquisition strategies of GPB Holdings, LP (“Holdings I”), GPB Automotive Portfolio, LP (“Auto Portfolio”) and GPB Holdings II, LP (“Holdings II”), each a GPB sponsored entity, overlap with our strategy of acquiring and operating businesses in the same industries. Holdings I (closed to new money) has raised approximately $193,000,000, Auto Portfolio has raised $419,000,000 as of September 2017 and is seeking to raise up to $750,000,000 through its offering and Holdings II has raised $471,000,000 as of September 2017 and is seeking to raise up to $750,000,000 through its offering.

Additionally, the Company will invest in the Waste Management industry through investment into GPB Waste Management Holdings, LLC, a holding company affiliated with GPB Waste Management, LP. GPB Waste Management, LP, a GPB sponsored entity has raised approximately $84,000,000 as of September 2017 and is seeking to raise up to $400,000,000 through its offering. Through its investment into GPB Waste Management Holdings LLC, the Company will own a pro-rata portion of all assets acquired by GPB Waste Management, LP.

Portfolio Company Interests GPB may acquire an ownership stake on behalf of Other GPB Entities or for its own account in a Portfolio Company that is a competitor of another one of our Portfolio Companies or that is a service provider, supplier, customer, or other counterparty with respect to one of our Portfolio Companies. In providing advice and recommendations to, or with respect to, such Portfolio Companies, and in dealing in their securities on behalf of Other GPB Entities or GPB, to the extent permitted by law, GPB will not have regard to our interests and Portfolio Companies. Accordingly, such advice, recommendations, and dealings may result in adverse consequences to us or our Portfolio Companies. As noted above, conflicts of interest may also arise with respect to the allocation of GPB’s time and resources between such Portfolio Companies. To the extent not restricted by confidentiality requirements or applicable law, GPB may apply experience and information gained in providing services to our Portfolio Companies to provide services to competing Portfolio Companies invested in by GPB or Other GPB Entities.

GPB’s personnel may serve as directors or officers of Portfolio Companies and will, as a result, be subject to fiduciary obligations to make decisions that they believe to be in the best interests of the Portfolio Company. Although in most cases our interests and its Portfolio Companies will be aligned, this may not always be the case, particularly if a Portfolio Company is in financial difficulty. This may result in a conflict between the relevant director’s obligations to the Portfolio Company and our interests. In some circumstances, having GPB personnel serve as directors or officers of a Portfolio Company (including, for these purposes, the Portfolio Company of any Other GPB Entities) may restrict our ability to acquire direct interests in an acquisition opportunity that also constitutes an acquisition opportunity for such Portfolio Company.


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Service Providers GPB will generally select service providers by collecting multiple bids for services and using reasonable diligence by taking into account factors such as expertise, availability and quality of service and the competitiveness of compensation rates in comparison with other service providers satisfying GPB’s service provider selection criteria. GPB will generally determine the compensation of such providers without review by or consent of the Limited Partners, the Advisory Committee or other independent parties. We, regardless of the relationship to GPB of the person performing the services, will bear the fees, costs and expenses related to such services. This could create conflict of interest for us. In certain circumstances, advisors and service providers, or their affiliates, may charge different rates or have different arrangements for services provided to GPB or its affiliates as compared to services provided to us and its Portfolio Companies, which may result in more favorable rates or arrangements than those payable by us or such Portfolio Company. Mr. Gentile is a member of the board of directors of Alphaserve Technologies, an IT services company. To the extent Alphaserve Technologies perform services to us and GPB, such services shall be rendered to us on terms that are equal to or better than those that apply for GPB.

Operations Support Providers GPB has relationships with experienced executives, managers, consultants and other advisors with relevant insight, access, sector-specific expertise, operating or other experience. These individuals, who we consider to be “Operations Support Providers,” provide several benefits to the acquisition process and to the management of Portfolio Companies, including serving as a source of proprietary deal flow and contacts, identifying operational opportunities and pitfalls during the due diligence process, providing sector-specific operational and competitive insight, providing direction and oversight post-acquisition, serving in an executive or board capacity, and helping to build and mentor management teams. If an Operations Support Provider is engaged as a consultant or advisor to the Company, a GPB affiliate, such as a Related Party, or a Portfolio Company, or as an officer or member of the board of directors of a Portfolio Company, the Company or the applicable Portfolio Company will pay for and bear the costs of services at rates determined in good faith by GPB or the Portfolio Company, as applicable. Equity compensation paid to former owners of our Portfolio Companies is an additional transaction related fee that will increase the cost of an acquisition. We believe these incentive compensation arrangements with the Operations Support Providers are necessary for the success of our acquisitions and ultimately in the best interest of our LPs. For additional information on the compensation of Operations Support Providers, see “Company Fees & Expenses – Partnership Expenses.”

Principal Transactions; Borrowing Operations Support Providers, including executive and non-executive employees of GPB, may provide us or our Portfolio Companies with services, including serving as members of the board of directors of one or more of our Portfolio Companies. For serving as a member on any such board of directors, certain employees of GPB will be entitled to receive compensation in the form of director fees and director incentive compensation. Any such fees and compensations paid to the directors will be commensurate with standard arms-length rates. However, C-Level Personnel of GPB who serve on the board of directors of any of our Portfolio Companies will not be entitled to receive any compensation for such services.

We will not enter into any Inter-Company Loans.

When a Portfolio Company (or group of Portfolio Companies) in the Automotive Retail sector is acquired by the Company and Other GPB Entities in connection with a joint venture, financing arrangements may carry joint and/or several obligations among the assets of such Portfolio Companies (or among such Portfolio Companies). In such situations, these joint and/or several obligations are generally limited to the specific assets of the Portfolio Companies for which the financing is being utilized. Any such joint and/or several obligations could result in a Portfolio Company (or an asset of a Portfolio Company) bearing more than its share of a particular obligation if such other Portfolio Companies (or other assets of such Portfolio Company) are unable to repay their pro-rata share.

Third Party Fees GPB has the right to assign all or a portion of the Managerial Assistance Fee otherwise payable to GPB, and we may pay such Managerial Assistance Fee, to designated placement agents for services rendered by such placement agents in connection with the Offering, including placement agents that are members of the Selling Group. The placement agents are not acting as investment advisers to potential investors. Potential investors must make their own investment decisions. GPB also has the right to defer, reduce or waive all or a portion of the Managerial Assistance Fee for certain Limited Partners as GPB may determine in its sole and absolute discretion (and intends to waive the Managerial Assistance Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company). Neither the Company nor


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GPB will be required to notify any other Limited Partner if and when GPB determines to defer, reduce or waive any Managerial Assistance Fee for a Limited Partner, nor will the Company or GPB be required to offer the same reduction or waiver to any other Limited Partner.

Upon the consummation of acquisitions of certain Portfolio Companies, the Company will pay qualified third parties, including members of the Selling Group (other than persons holding an interest in the Portfolio Company), an Acquisition Fee, which is equal to 1.75% of the total acquisition cost of the Portfolio Company. The Acquisition Fee will be paid in consideration of services provided in our Offering, including but not limited to identifying, structuring and providing us with advice on our acquisitions or capital raising efforts. GPB presently anticipates the Company paying Acquisition Fees to Ascendant Alternative Strategies, LLC, of which Ascendant is a branch office, and we may identify other third parties for which we determine such compensation would be appropriate. GPB, in its sole discretion, may defer, reduce or waive the Acquisition Fee with respect to one or more Limited Partners (and intends to waive the Acquisition Fee with respect to the General Partner, the Special LP and their affiliates who invest in the Company).

Managerial Assistance Fee; Performance Allocation The Managerial Assistance Fee payable by us to GPB and the Performance Allocation that the Special LP will receive have been determined solely by GPB and the Special LP, respectively. GPB’s principals and certain employees may become members of the Special LP. As noted above, certain officers, employees and directors of Ascendant may become members of the Special LP and, as such, may become entitled indirectly to receive a profit allocation from the Company. Certain officers and employees of AAS also act as placement agents for this Offering and are part of the Selling Group. Other placement agents for this offering may also be eligible to receive ownership interests in the Special LP in the discretion of the Special LP.

Diverse Investors The Limited Partners are expected to include natural persons or entities, including tax-exempt organizations, which are subject to different tax and regulatory regimes. The Limited Partners may thus have conflicting investment, tax and other interests with respect to their investments in us. The conflicting interests of individual Limited Partners may relate to or arise from, among other things, the nature of our acquisitions, the structuring of our acquisitions and the timing of disposition of our Portfolio Companies. As a consequence, conflicts of interests may arise in connection with decisions made by GPB, including with respect to the nature or structuring of acquisitions that may be more beneficial for one investor than for another investor. The results of our activities may affect individual Partners differently, depending upon their individual financial and tax situations because, for instance, of the timing of a cash distribution or of an event of realization of gain or loss and its characterization as long-term or short-term gain or loss. In addition, we may make acquisitions that may have a negative impact on related investments made by the Limited Partners in separate transactions. In selecting and structuring acquisitions appropriate for us, GPB will consider our acquisition and tax objectives and our Partners as a whole, and not the acquisition, tax or other objectives of any Limited Partner individually. However, there can be no assurance that a result will not be more advantageous to some Limited Partners than to others or to GPB and/or its affiliates than to a particular Limited Partner.

Related Activities The Related Parties, including GPB executives, and certain broker-dealers involved in the Offering also may make investments alongside us. The Related Parties may have investments in certain of the entities managed by a Related Party, and/or serve as officers and/or directors (and receive fees or other compensation in connection therewith) of entities in which we invest.

Advisory Committee We will have an Advisory Committee composed of members who will be appointed by the GP and who will be independent of the GP, GPB and Ascendant (except to the extent a member may be employed by or otherwise affiliated with a member of our Selling Group other than Ascendant). We may enter into Related Party Transactions with the unanimous approval of the Advisory Committee. With respect to Related Party Transactions that are acquisitions, (i) the acquisition must be documented in writing by the General Partner and Advisory Committee as being on terms no less favorable to the Company as could be obtained in a transaction negotiated at arms-length with an Independent Person, (ii) the General Partner must provide the Advisory Committee with an independent valuation of the proposed acquisition, and (iii) the Advisory Committee must determine that the acquisition is in the best interests of the Company.


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Affiliation with Ascendant Alternative Strategies, LLC Offers and sales of the Class B-1 Units will be sourced primarily through Ascendant Alternative Strategies, LLC (“AAS”), an affiliate of GPB. Ascendant Capital, LLC (“Ascendant Capital”) is a branch office of AAS. The Company will enter into a Dealer Manager Agreement with AAS, as summarized below. David Gentile, GPB’s Founder and Chief Executive Officer, is an indirect minority owner of AAS (but not Ascendant Capital). Mr. Gentile is not actively involved in the day-to-day operations of AAS. AAS is registered with the SEC as a broker-dealer and is a member of FINRA/SIPC, and is authorized to engage in the following activities: (i) offering private placements; (ii) selling limited partnerships in primary distributions; and (iii) acting as a wholesaling broker-dealer, selling interests in various types of direct investment products. AAS may, in the future, seek the approval of the SEC and/or FINRA to engage in additional securities and investment banking activities, and engage in such activities as permitted by the SEC and/or FINRA.

The relationship between GPB and AAS gives rise to conflicts of interest between GPB and the Company, as AAS’s interests and/or the interests of its clients may conflict with the interests of the Company and its Limited Partners. GPB presently anticipates the Company paying Acquisition Fees, Performance Allocations, Selling Fees, Servicing Fees and Operations Expenses to AAS and/or its owners, officers, directors, or employees. Such fees and expenses may be substantial, and are in addition to the Managerial Assistance Fees or any other fees payable by the Company to GPB. As AAS is an affiliate of GPB, such compensation may not in each case be negotiated at arm’s length and from time to time may be in excess of fees, commissions or other compensation that may be charged by an unaffiliated third party.

Nothing in this Memorandum or in the Company’s LPA precludes or in any way limits the activities of AAS, including its ability to buy or sell interests in, or arrange financing to, portfolio companies of the Company or competitors of portfolio companies. For example, Ascendant may from time to time perform services for clients who may have interests that conflict with those of portfolio companies or the Company. Ascendant’s activities are carried out generally without reference to assets held directly or indirectly by the Company, even though such activities may have an effect on the value of the assets so held.

AAS may from time to time also act as placement agent in respect of unaffiliated investment funds or portfolio companies that may compete with the Company. In providing such services to, or with respect to, a competitor fund or company, In providing such services, AAS may not take into consideration all of the interests of the Company.

In addition, AAS may from time to time collect fees from a company in which the Company has an interest, and such fees will not benefit Limited Partners in the Company. GPB has an incentive to seek to influence the decision by a portfolio company’s management to retain AAS, or to otherwise transact with AAS, instead of other unaffiliated broker-dealers or other service providers or counterparties that may be more appropriate or offer better terms.

By acquiring Units in the Company, each Limited Partner will be deemed to have acknowledged the existence of any actual and potential conflicts of interest set forth herein in connection with the Company’s affiliation with AAS, and to have waived any claim with respect to any liability arising from the existence of any such conflicts of interest.

Summary of the Dealer Manager Agreement with AAS On October 13, 2017, the Company entered into a dealer manager agreement (the “Dealer Manager Agreement”) with AAS whereby the Company appointed AAS to act as the exclusive dealer manager (the “Dealer Manager”) of the Company. As Dealer Manager, AAS will solicit and retain soliciting dealers (“Soliciting Dealers”) to solicit subscriptions for the Class A-1 Units. In no event shall the Dealer Manager be entitled to payment of any compensation in connection with a sale pursuant to the Offering that is not completed according to the Dealer Manager Agreement; provided, however, that the Dealer Manager may be reimbursed for reasonable out-of-pocket expenses incurred in connection with the Offering. No Commissions, Wholesaling Fees or Placement and Marketing Support Fees (as defined in the LPA) will be paid with respect to sales of Class B-1 Units. For sales of Class B-1, an annual Servicing Fee equal to 0.4% of capital contributions will be initially payable upon an investor’s subscription for Class B-1 Units and payable annually thereafter for so long as such investor holds an interest in such Units.

The Company shall reimburse the Dealer Manager for reasonable bona fide due diligence expenses incurred by the Dealer Manager.

SUMMARY OF THE LPAThe following description of certain provisions of the LPA, which governs substantially all aspects of our business, including the rights and obligations of the GP and the other LPs, is not intended to be complete, and reference is made to the detailed provisions of the LPA. All prospective Limited Partners should read


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the LPA in their entirety and may wish to consult with their own counsel with respect thereto. A representation that the prospective Investor has done so is contained in the Subscription Documents. A copy of the LPA is attached as Exhibit A. Capitalized terms used below and not otherwise defined have the same meaning as provided in the LPA.

Nature of Company & Limitation of Liability The Company is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act (the “Act”). The LPA limits LPs’ liability for our losses or debts up to their Capital Contributions and the obligation, if any, to return distributions to the Company to the extent required under the Act.

Under the Act, a limited partnership may not make a distribution to a partner to the extent that, at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their limited partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the limited partnership’s assets. A Limited Partner who receives a distribution in violation of this provision, and who knew at the time of the distribution that the distribution violated this provision, is liable to the limited partnership for the amount of the distribution.

Control of Operations The GP is vested with the exclusive management and control of our business. LPs have no power to take part in the management of or bind us. No person should become a Limited Partner unless such person is willing to entrust all aspects of the management of the Company to the GP. The GP may contract with any person to carry out any of its duties and may delegate to such person any of its power or authority under the LPA (including GPB), but no such contract or delegation will relieve the GP of any of its duties or obligations thereunder. In addition, any lender may restrict the ability of the GP to take certain actions without such lender’s consent.

Removal of the General PartnerThe GP may be removed as General Partner upon the affirmative vote (whether given in writing, by means of electronic transmission, or at any meeting called in accordance with Section 3.10 of the LPA) of at least 20% of the LPs, without regard to ownership percentage, who are not affiliates of the GP to remove the GP if any of the following events occur: (i) a final, non-appealable judicial determination that the GP has committed fraud, gross negligence or willful misconduct in connection with its material obligations to the Company under the LPA, provided that such fraud, gross negligence or willful misconduct has a material adverse effect on the Company, or (ii) (A) an action or proceeding under the United States Bankruptcy Code is filed against the GP and (I) such action or proceeding is not dismissed within 90 days after the date of its filing or (II) the GP files an answer acquiescing in or approving of such action or proceeding, (B) an action or proceeding under the United States Bankruptcy Code is filed by the GP or (C) a receiver or conservator is appointed to take control of the GP or all or a substantial portion of its property. If the GP were to be so removed, a majority of the LPs will elect a successor general partner, any Units held by the GP would be exchanged for Units as a Limited Partner in a new class of Units that does not carry any voting rights, and the Special LP’s Performance Allocation shall be deemed to have been contributed to the Special LP except to the extent the General Partner is removed pursuant to clause (i) above in which case the Special LP’s Performance Allocation will be automatically forfeited to the Company.

Voting Rights of LPs The Limited Partners do not have voting rights except in certain situations specified in the LPA.

Liability of General Partner; Indemnification To the fullest extent provided by law, our debts, liabilities and obligations belong solely to us, and the GP will not be liable or obligated personally for any such debt, liability or obligation solely by reason of its status as General Partner. The GP, GPB, the tax matters partner or partnership representative and their respective affiliates will not be liable to us or any Limited Partner for losses sustained, liabilities incurred, or benefits not derived by the LPs in connection with (i) any decisions made by, or actions taken or not taken by, the GP, GPB, the tax matters partner or partnership representative or their affiliates, so long as the GP, GPB, the tax matters partner or partnership representative or their affiliates acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interests of the Company and their conduct did not constitute gross negligence, fraud or willful or wanton misconduct; or (ii) any Partner’s experience of identity theft or other similar criminal activity.

The LPA provides that we will, to the fullest extent permitted by law, indemnify the GP, GPB, the tax matters partner or partnership representative and their respective officers, directors, members, employees and other related parties and their respective affiliates (collectively, “Indemnified Persons”), and advance


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expenses to Indemnified Persons as described in the LPA. The Company will indemnify Indemnified Persons for losses, liabilities and damages sustained by them if they acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to any criminal action, had no reasonable cause to believe that their actions were unlawful. No indemnification will be made for any claim for which an Indemnified Person is found to be liable for gross negligence, willful misconduct, fraud, or a material breach of the LPA. To the extent that an Indemnified Person is successful in defending a suit, they will be indemnified against expenses, including attorney’s fees, actually incurred in connection therewith.

Expenses incurred by the Indemnified Person in defending any suit or action will be paid by the Company in advance of final disposition of the action or suit, provided that the Indemnified Person will undertake to repay the amount if they are found not to be entitled to indemnification. The indemnification and advancement of expenses provided to the Indemnified Persons are not exclusive of any other rights to which the Indemnified Person may be entitled. The Company reserves the power to buy and maintain insurance on behalf of GPB and its affiliates in addition to these indemnification provisions.

Conflicts of Interest The LPA restricts us from entering into any Related Party Transaction without the approval of all of the members of the Advisory Committee. With respect to Related Party Transactions that are acquisitions, (i) the acquisition must be documented in writing by the General Partner and Advisory Committee as being on terms no less favorable to the Company as could be obtained in a transaction negotiated at arms-length with an Independent Person, (ii) the General Partner must provide the Advisory Committee with an independent valuation of the proposed acquisition, and (iii) the Advisory Committee must determine that the acquisition is in the best interests of the Company. In addition, the General Partner will not cause the Company to purchase an asset from, or sell an asset to, any Other GPB Entities, except to the extent such transaction (i) is part of a Roll Up Event and (ii) complies with the Related Party Transaction conditions set forth above. See “Related Parties & Conflicts of Interest.”

Capital Contributions & Capital Accounts Each LP will have a Capital Account established on the books of the Company which will be credited with such LP’s Capital Contribution, net of Selling Fees (the “Net Capital Contribution”). Each such Limited Partner’s Capital Account will be increased to reflect (i) any additional Capital Contributions by and (ii) any Net Profits allocable to such Limited Partner, and will be decreased to reflect (y) any distributions to and (z) any Net Losses allocable to such Limited Partner.

Additional Capital Contributions Additional Capital Contributions may be made by LPs at any time while the Offering is open in amounts of at least $10,000, subject to the GP’s discretion to accept lesser amounts. Such additional contributions will not be “credited” to us (i.e., deemed to be part of our assets for purposes of calculating Allocation Percentages or Net Profits and Net Losses) until the later of acceptance by us and the first day of the calendar month following such Additional Contributions. The GP may, in its sole discretion, reject any additional subscription request.

Allocation of Net Profits & Net Losses For each Fiscal Period (fiscal quarters or Fiscal Years), Net Profits and Net Losses generally will be allocated to the LPs, including the Special LP and the GP, according to their Capital Accounts in a manner sufficient to cause each LP’s Capital Account to equal the amounts such LPs would receive upon the liquidation of the Company. Net Profits and Net Losses are determined on an accrual basis of accounting in accordance with GAAP. “Net Profits” or “Net Losses” are our taxable income or loss determined in accordance with the Code, with adjustments provided in the LPA.

The GP intends for us to make periodic distributions of cash, if any, to each LP beginning on the fifteenth day of the third month following such LP’s applicable subscription for Units. We will apportion and make distributions of cash as it’s available (after payment of any tax distributions, see below, and payment and reservation of all amounts deemed necessary by the GP) in the following amounts and order of priority:

Amounts will initially be apportioned among the LPs in respect of each class of their Units in proportion to each class of Unit’s Net Distribution Share (as defined in the LPA) and will be further apportioned between each such LP and the Special LP and, except as otherwise provided in the LPA, distributed with respect to each such Partner in respect of each class of its Units (on a Partner by Partner basis) as follows:

(i) first, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (i) equal to such LP’s Net Capital Contribution (as defined below)


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plus the aggregate amount (if any) of any waivers of or reductions in fees that would otherwise be attributable to such LP in respect of such class of Units;

(ii) second, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (ii) and clause (i) equal to such LP’s aggregate Capital Contributions with respect to such class of Units;

(iii) third, 100% to such LP until such LP has received cumulative distributions in respect of such class of Units pursuant to this clause (iii) and clause (v) below in an amount equal to the Preferred Return with respect to such class of Units;

(iv) fourth,100% to the Special LP until the cumulative distributions in respect of such class of Units made to the Special LP pursuant to this clause (iv) equal 20% of the sum of all amounts distributed to such LP in respect of such class of Units pursuant to clauses (ii) and (iii) and the Catchup; and

(v) fifth, 80% to such LP and 20% to the Special LP.

Additionally, the GP may cause the Company to advance amounts to the Special LP sufficient to cover tax liabilities of the Special LP or its members attributable to allocations of amounts under clauses (iv) and (v) above (“tax distributions”). Any such tax distributions will be treated as an advance against any future distributions that the Special LP is entitled to under clauses (iv) and (v) above.

After the winding up of the Company, the Special LP will be required to restore funds to the Company to the extent that it has received cumulative distributions under clauses (iv) and (v) above in excess of amounts distributable to the Special LP pursuant to the distribution provisions set forth above; provided, however, that the Special LP’s will not be required to restore funds in excess of the cumulative distributions under clauses (iv) and (v) above that the Special LP has received from the Company, net of (i) the Special LP’s tax liabilities with respect to those distributions, as determined in accordance with the LPA, less (ii) the tax benefit of losses allocated to the Special LP to reverse prior allocations of taxable income to the extent that such tax benefits are actually realized in the form of a reduction in tax liability otherwise owed as determined by the Special LP in its sole discretion. The amount so contributed will be for the sole benefit of the Limited Partners and not creditors of the Company, and may be paid directly to the Limited Partners by the Special LP.

By way of example of the waterfall provided above, if (i) we have only one LP with Class B-1 Units and the Limited Partner’s gross Capital Contribution is $100,000 and (ii) we make monthly distributions of $725 (based on a target annual distribution rate of 8%) and an additional distribution of $200,000 on the first anniversary of the Limited Partner’s subscription, then the waterfall with respect to its Class A-1 Units would be calculated as follows:

First, $99,600 to the LP under clause (i) above as a return of the Limited Partner’s Net Capital Contribution;

Second, $400 to the LP under clause (ii) above as a return of the Limited Partner’s Capital Contribution;

Third, $8,768 to the LP as the Preferred Return;

Fourth, $2,292 to the Special LP as the Catchup;

Fifth, $97,640 as follows: (i) $78,112 (or 80%) to the LP and (ii) $19,528 (or 20%) to the Special LP (the Performance Allocation).

In the example above, distributions to the Class B-1 Limited Partner would total $187,060 constituting the return of the LP’s $100,000 Capital Contribution plus $87,060) and distributions to the Special LP would total $21,820. All subsequent distributions with respect to the LP’s Class A-1 Units would be shared 80/20 between the LP and the Special LP under clause (v) above, since all of the LP’s Capital Contributions with respect to such class of Units would have been returned, plus payment of the Preferred Return.14

Because of differences in the Preferred Return rate and/or the amount of Selling Fees attributable to LPs holding different Unit classes, there will be variances in the amounts individual LPs receive from the Company.

14 This waterfall example is for illustrative purposes only and the distributions set forth in this example will likely exceed the distributions made to Limited Partners holding Class B-1 Units during such time period. There can be no assurance that such returns will be achieved, and an investment in the Company entails a risk of full loss.


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We are restricted in the distribution of profits by the Act, which prohibits a limited partnership from making a distribution of profits to its partners if, after giving effect to the distribution, the limited partnership would be unable to pay its debts as they become due in the usual course of business, or if the limited partnership’s total assets would be less than the sum of its total liabilities. Even if we may legally declare distributions, the amount and timing of such distributions will depend on our earnings, if any, our financial condition, and other factors considered relevant by the GP. While LPs will receive current distributions out of cash, we are not required to return any capital to the Limited Partners until the Company is liquidated.

Winding Up of the Company Upon the winding up or termination of the Company, the Company will be wound up in accordance with the LPA. The GP is empowered to distribute our assets in-kind when liquidating the Company, and such in-kind assets may be difficult for individual LPs to monetize.

Amendment of LPA & Other Action The LPA generally may be modified or amended at any time with the affirmative written consent of the General Partner and the Majority of Limited Partners; provided, however, that each adversely affected Partner must approve an amendment that would (i) reduce such Partner’s Capital Account, (ii) convert a Limited Partner’s interest into a General Partner’s interest or modify the limited liability of a Limited Partner or (iii) amend the provisions of the LPA relating to amendments, including Section 13.1 of the LPA; and provided, further, that the General Partner has the power, without the consent of any Limited Partner, to amend the LPA as may be required to (i) reflect the admission, substitution, termination, or withdrawal of Partners or of additional classes of Units in accordance with the LPA; (ii) reflect a change in the name of the Partnership; (iii) make a change that is necessary or, in the opinion of the General Partner, advisable to qualify the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or foreign jurisdiction, or ensure that the Partnership will not be treated as an association taxable as a corporation or as a publicly traded partnership taxable as a corporation for federal income tax purposes; (iv) make a change that does not adversely affect the Limited Partners in any material respect; (v) make a change that is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, statute, ruling or regulation of any federal, state or foreign governmental entity, so long as such change is made in a manner that minimizes any adverse effect on the Limited Partners; (vi) make a change that is required or contemplated by the LPA; (vii) make a change in any provision of the LPA that requires any action to be taken by or on behalf of the General Partner or the Partnership pursuant to applicable Delaware law if the provisions of applicable Delaware law are amended, modified or revoked so that the taking of such action is no longer required; (viii) prevent the Partnership from in any manner being deemed an “investment company” subject to the provisions of the 1940 Act; (ix) create a new class of interests subject to different terms than the classes currently in existence (including, without limitation, with respect to withdrawal rights, fees and/or expenses, and/or performance allocation), such ability not to be limited by (iv) above; (x) address legal, tax, regulatory, accounting or other similar issues affecting one or more Partners; (xi) make a change if any statute, rule or regulation is enacted or promulgated or the Internal Revenue Service issues any notice or announcement that affects the U.S. federal income taxation treatment of the income or gain related to the Performance Allocation (a “Change in Tax Treatment”), so that the Special LP (or its partners) are in the same after-tax position as each would have been had such Change in Tax Treatment not been enacted, promulgated or issued; (xii) make any change, correct or supplement any provision herein relating to the partnership audit rules (as described below in “Certain Tax, ERISA & Regulatory Matters––Certain Tax Considerations––New Partnership Audit Rules”), or to authorize the partnership representative, in its capacity as such, to undertake any action on account of the partnership audit rules; or (xiii) make any other amendments similar to the foregoing.

Assignment & Transfer of Units There are significant restrictions on the transferability of Units. See “Restrictions on Transfer of Interests.”

Compulsory Transfer or Acquisition of Units The LPA grants the GP the authority to require a Limited Partner to transfer its Units or, if the Limited Partner does not transfer its Units within 21 days, to have the Company reacquire such Units for the price paid by such Limited Partner without interest. The GP may exercise this power if, in its sole determination, any continued holding of Units by any direct or beneficial LP might cause or be likely to cause an Adverse Effect.

Limited Redemption Rights LPs who have held their Units for at least one year may request that we repurchase all, but not less than all, of their Units; though LPs do not have a right to demand a return of their capital. An LP wishing to have Units redeemed must mail or deliver in writing a request to us indicating that desire. The price for a


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redeemed Unit will be the Redemption Price Per Unit (as defined below) as of the close of business on the applicable redemption date, minus any fees incurred by the Company in connection with the redemption, including legal and administrative costs for redemption, with such fees to not exceed 2% of such Limited Partner’s Capital Contributions. “Redemption Price Per Unit” means (1) for redemptions made during the Offering, 97% of the Offering Price Per Unit less any Commissions and Organization and Offering Expenses paid in respect of such Unit; or (2) for redemptions made after the end of the Offering, 97% of (A) (i) cash, the gross asset value of the Portfolio Companies, the value of which shall be calculated as follows: (a) for the first six months after the acquisition of a Portfolio Company, the acquisition cost of such Portfolio Company and (b) thereafter, the fair value of such Portfolio Company, determined in accordance with ASC 946, and other assets less (ii) Partnership Expenses, Organization and Offering Expenses, and any other liabilities, divided by (B) the aggregate number of Units of the Company; and in either option (1) or (2), less the Performance Allocation.

We intend to redeem Units on a quarterly basis on the last business day of each calendar quarter and will not redeem in excess of 10% of the Units during any 12-month period, provided that the Company will not redeem any Units held by an LP prior to the time that is 60 calendar days after the Company receives the required written notice from the LP. The GP reserves the right in its sole discretion at any time and from time to time to (i) reject any request for redemption, (ii) change the Redemption Price Per Unit or prior notice period for redemptions, or (iii) terminate, suspend and/or reestablish our redemption program. The GP will determine from time to time whether the Company has sufficient excess cash from operations to repurchase Units. Generally, the cash available for redemptions will be limited to 10% of our operating cash flow from the previous fiscal year. If funds set aside for the redemption program are not sufficient to accommodate all requests as of any calendar quarter end, then at such future time, if any, when sufficient funds become available, in the GP’s sole discretion, pending requests will be honored among all requesting LPs in accordance with their order of receipt.

Power of Attorney Under the LPA and the Subscription Agreement, you appoint the GP as your attorney-in-fact for signing certain documents, including the LPA. You cannot revoke this special power of attorney, which will survive your death and any transfer of your Units.

Meetings & Reports We have adopted a taxable year ending on December 31. Books of account will be kept by the Company in accordance with GAAP. GPB will perform an annual valuation of the Company in conformance with GAAP, and our financial statements will be annually audited by a PCAOB-registered firm and provided to the LPs.

Our books and records, including certain information regarding the GP, copies of the LPA and certain other organizational documents, and federal, state and local income tax or information returns and reports will be maintained at the office of the Company. Any LP will, at its expense and upon providing the GP with no less than 10 business days’ prior written request, have access to the books and records of the Company (excluding the list of Partners, but including the Register) during normal business hours or as designated by the GP for such purposes as required by the Act; provided, however, that the LP exercising such right may not unreasonably interfere with or disrupt our business.

Within 120 days after the end of each Fiscal Year, beginning in 2018, the GP will deliver to each LP on our behalf (i) an audited financial report of the Company for such Fiscal Year containing a balance sheet as of the beginning and the end of such Fiscal Year, a statement of changes in the Limited Partners’ equity as of such dates; and a statement of operations for such period, and (ii) all necessary tax reporting information, which information will include all necessary information in order for all LPs to satisfy reporting obligations under the Code with respect to any acquisitions we make in any entities organized or formed in jurisdictions outside the United States.

Within 45 days after the end of each Fiscal Quarter, the GP will use best efforts to deliver to each LP an unaudited summary investment report of the Company for such Fiscal Quarter; provided that if our Units become registered under the 1934 Act, the GP may elect to provide such information with reference to our 1934 Act quarterly reports filed with the SEC.

The GP may call meetings of the LPs from time to time to consider the advisability of taking certain action in conducting our business if in its opinion such a meeting would be useful in explaining the proposal, but the GP has no obligation to call such meetings.


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SERVICE PROVIDERS Auditor The Company, GPB and each Portfolio Company (except for Debt Strategies), will be audited annually on the basis of GAAP. McGladrey LLP (RSM), a firm registered with the Public Company Accounting Oversight Board (“PCAOB”) has been engaged as our auditor. The GP retains the authority to engage and dismiss any such auditors.

Administrator The GP has engaged the Administrator to perform various administrative services for us. The GP has initially so engaged Phoenix American Services, and retains the authority to engage and dismiss any such service provider. Phoenix American Services has been contracted to perform the following functions:

Full Service Investor Administration – including New Business Processing

Bank Account Management

Electronic Document Management

Database & File Management

Electronic & Physical Data Storage

Confirmation Letters

Investor / Rep Record Access Through Customized Web Portal

Investor Relations Distributions

Redemptions

Account Summary

Commission Calculation

Tax Reporting

OFAC Compliance

CERTAIN TAX, ERISA & REGULATORY MATTERS CERTAIN TAX CONSIDERATIONS U.S. Federal Income Tax Matters The following is a summary of certain material United States federal income tax considerations that may be applicable to an investment in the Company. This summary is based on existing provisions of the Code, existing and proposed Treasury regulations promulgated under the Code (“Treasury Regulations”), and current administrative rulings and court decisions, all of which are subject to changes that could be applied retroactively. In particular, Congress and the Trump administration are considering substantial revisions to United States tax law; such revisions could impact the tax considerations relating to an investment in the Company.

This summary does not contain a comprehensive discussion of all U.S. federal income tax consequences that may be relevant to a prospective Investor in view of that prospective Investor’s particular circumstances or (unless otherwise indicated) to certain prospective Investors subject to special treatment under U.S. federal income tax laws – such as regulated investment companies, real estate investment trusts, partnerships or entities treated as partnerships for U.S. federal income tax purposes and investors therein, S corporations or other pass-through entities, personal holding companies, brokers or dealers in securities, banks and certain other financial institutions, tax-exempt organizations, persons holding Units as part of a hedging transaction, straddle, conversion transaction, or other integrated transaction, foreign governments (or certain entities controlled by foreign governments), Non-U.S. Investors (as defined below), trusts and insurance companies – nor does it address any state, estate, local, foreign or other tax consequences of an investment in the Company, except as otherwise provided herein.

No ruling has been requested from the IRS or any other U.S. federal, state or local agency with respect to the matters discussed below and the GP has not asked its counsel to render any legal opinions regarding any of the matters discussed below. This summary does not in any way either bind the IRS or the courts or constitute an assurance that the IRS would not assert, or that it would not sustain, a position contrary to any of the U.S. federal income tax consequences discussed herein.

As used herein, the term “U.S. Investor” means a beneficial owner of Class B-1 Units who or that is, for U.S. federal income tax purposes, (i) a citizen or resident (within the meaning of Code §7701(b)) of the United States, (ii) a corporation or other entity treated as such for U.S. federal income tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if a U.S. court is able to exercise primary supervision over its administration, and one or more U.S. trustees or


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fiduciaries have the authority to control all of its substantial decisions. A “Non-U.S. Investor” means a beneficial owner of Class B-1 Units who or that is not a U.S. Investor. If a partnership or entity treated as a partnership for U.S. federal income tax purposes owns Class B-1 Units, the U.S. federal income tax treatment of a partner or other owner of such entity generally will depend on the status of the partner or other owner and the activities of the partnership.

Except where otherwise indicated, this summary is based on the assumptions that (i) each Limited Partner (and each of its beneficial owners, as prescribed under U.S. federal income tax withholding and backup withholding rules) will provide all appropriate certifications to the Company in a timely fashion to minimize withholding (or backup withholding) on each Limited Partner’s distributive share of the Company’s gross income and (ii) the Limited Partners will hold their Units as capital assets for U.S. federal income tax purposes.

The following summary of certain U.S. federal tax considerations is not intended as a substitute for tax or legal advice. Except where otherwise indicated, this discussion is addressed solely to prospective Investors who are or would be U.S. Investors. Accordingly, prospective Investors should consult with their own tax advisors with regard to the application of the United States federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.Classification as a Partnership The Company intends to be treated as a partnership, rather than a corporation, for U.S. federal income tax purposes. If the Company is treated as a partnership and is not a “publicly traded partnership” taxable as a corporation for U.S. federal income tax purposes, the Company will generally not be subject to U.S. federal income tax (except in certain circumstances as a result of an audit, as further described below), and each Limited Partner will be required to include in income its allocable share of each item of income, gain, loss, deduction or credit earned or realized by the Company, whether or not the Company makes any distributions to that Limited Partner,

An entity that would otherwise be treated as a partnership for U.S. federal income tax purposes may nonetheless be treated as a corporation if it is a “publicly traded partnership”, or “PTP”. Under Code §7704, a partnership the interests of which are either publicly traded on an established securities market or readily tradable on a secondary market (or the substantial equivalent thereof), will be treated as a PTP and may be taxed as a corporation for U.S. federal income tax purposes. Under Treasury Regulation §1.7704-1(d), interests in a partnership are not considered traded on an established securities market or readily tradable on a secondary market unless the partnership participates in the establishment of the market or the inclusion of its interests in a market, or the partnership recognizes any transfers made on the market by redeeming the transferor partner, admitting the transferee as a partner, or otherwise recognizing any rights of the transferee.

The Company will not list any Units on any stock exchange. The Treasury Regulations provide certain safe harbors that, if satisfied, will allow transfers to occur that will not result in the Units being treated as publicly-traded or treated as readily tradable on a secondary market or the substantial equivalent. The safe harbors include transfers:

• In “private” transfers;

• Pursuant to a qualified matching service (“QMS”); or

• In limited amounts that satisfy a 2% test.

“Private” transfers include, among others:

• Transfers in which the basis of the partnership interest in the transferee is determined, in whole or in part, by reference to its basis in the hands of the transferor or is determined under Code §732, related to distributions from a partnership;

• Transfers at death, including transfers from an estate or testamentary trust;

• Transfers between members of a family as defined in Code §267(c)(4);

• Transfers from retirement plans qualified under Code §401(a) or an IRA; and

• “Block transfers.” A block transfer is a transfer by a Limited Partner and any related persons as defined in the Code in one or more transactions during any 30 calendar day period of Units that in the aggregate represents more than 2% of the total interests in partnership capital or profits.


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Transfers through a QMS are also disregarded in determining whether Units are readily tradable. A matching service is qualified only if it meets extensive conditions and limitations. We do not have any plan to utilize a QMS at this time.

In addition, interests are not treated as readily tradable if the sum of the percentage of the interests transferred during the entity’s tax year, excluding private transfers, does not exceed 2% of the total interests in partnership capital or profits. The LPA provides that Limited Partners must receive the consent of the GP prior to any transfer of Units, and one of the conditions to approval is that the transfer will not cause it to be treated as a PTP. The Company intends to be treated as a partnership and not as a PTP for U.S. federal income tax purposes, but there can be no assurance in this regard.

If the Company is classified as an association taxable as a corporation instead of as a partnership, for any year, the Company would be subject to U.S. federal income tax on our taxable income at rates applicable to corporations and any applicable state and local taxes; distributions to Limited Partners would be taxable as dividends to the Limited Partners to the extent of the Company’s current and accumulated earnings and profits and would not be deductible by the Company; and the Company’s deductions, if any, would be allowed only by the Company, rather than being passed through to Limited Partners.

The remainder of this discussion of “Certain Tax, ERISA & Regulatory Matters” assumes that the Company will be classified as a partnership, and not as a corporation, for U.S. federal income tax purposes. Thus, the following rules applicable to partnerships and their partners will apply to the Company and its Limited Partners unless otherwise indicated.

Allocations of Income, Gains, Losses, Deductions & Credits. For U.S. federal income tax purposes, a partnership is not a taxable entity but rather a conduit through which items of income, gain, loss, deduction and credit are passed and its partners must report. Thus, each U.S. Investor will be required to report on its federal income tax return its allocable share of items of income, gain, loss, deduction or credit realized by the Company, whether or not such Investor receives any actual distribution from the Company during the taxable year. Because portions of the Company’s available cash will be used to fund certain expenses and may be used to repay borrowings for which we are liable, such funds may not be available for distribution to U.S. Investors. In addition, certain of the investments held by the Company may give rise to taxable income even if there has been no corresponding cash distribution to the Company. Consequently, a U.S. Investor may be allocated income from the Company in a particular year, yet may not receive a cash distribution in respect of such income, and would have to find an alternate source of funds to pay its taxes on such amount. Taxable income or loss allocated to Limited Partners from the Company will retain the same character, as capital gain or loss, or ordinary income or loss, for the Limited Partners as determined at the Company level. Such income will be capital gain or loss to the extent that it arises from the sale of capital assets.

Code §704(b) and the Treasury Regulations thereunder provide that a partner’s distributive share of income, gain, loss, deduction or credit will be controlled by the partnership agreement if the allocation provided for in the partnership agreement has “substantial economic effect.” If the allocation provided for in the partnership agreement does not have substantial economic effect, then a partner’s distributive share must be allocated in accordance with each partner’s interest in the partnership, which will be determined by taking into account all the facts and circumstances, such as a partner’s interest in profits and losses, relative share of capital contributed, interest in cash flow and right to distributions upon liquidation.

Treasury Regulations promulgated under Code §704(b) provide certain guidelines which, if satisfied by the Company, will result in the allocation of profits and losses being deemed to have substantial economic effect. If the IRS were to contend successfully that the allocation of profits and losses under the terms of the LPA was not in accordance with such guidelines, then each Limited Partner’s share of the income, gain, losses, deductions or credits from the Company would be determined in accordance with his, her or its interest in the Company, taking into account all the facts and circumstances, including those discussed above.

Qualified Business Income. Subject to certain restrictions, a non-corporate U.S. Investor (such as an individual, trust or estate) will generally be entitled to deduct 20% of its “qualified business income” for a taxable year. Qualified business income includes, for these purposes, income and gain from certain qualified trades or businesses, but does not include investment-related income such as net capital gain, dividend or interest income. For taxpayers whose income exceeds certain threshold amounts: (i) the deduction is subject to various limitations, including limitations based on the wages paid with respect to, and the adjusted tax basis of property held by, a qualified trade or business, and (ii) the deduction is not available with respect to income from certain service businesses. A portion of a Limited Partner’s allocable share of income or gain from the Company may constitute qualified business income, in which case it generally will be eligible for the deduction described above.


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Tax Basis in a Class B-1 Unit. A U.S. Investor’s tax basis in a Class B-1 Unit initially will equal the amount paid to acquire such Class B-1 Unit. It will be increased by (i) any subsequent cash contributions the U.S. Investor makes to the Company, (ii) the U.S. Investor’s distributive share of the Company’s taxable income, (iii) the U.S. Investor’s distributive share of the Company’s tax-exempt income, and (iv) any increase in the U.S. Investor’s share of the Company’s liabilities. It will be decreased (but not below zero) by (i) actual distributions the Company makes to the U.S. Investor, (ii) the U.S. Investor’s distributive share of the Company’s losses (even if such losses are deferred as described below), (iii) the U.S. Investor’s distributive share of the Company’s non-deductible expenses that are not properly chargeable to a capital account and (iv) a decrease in the U.S. Investor’s share of the Company’s liabilities.

Basis & At Risk Limitations on Deductions. U.S. Investors’ ability to deduct their share of deductions and losses will be limited to their adjusted tax basis in their Class B-1 Units as of the end of the Company’s tax year. In the case of a U.S. Investor that is an individual or a corporation (if more than 50% of the value of such corporation’s stock is owned directly or indirectly by five or fewer individuals or certain tax-exempt organizations), to the amount that the U.S. Investor is considered to be “at risk” with respect to the Company’s activities, if that is less than the U.S. Investor’s adjusted tax basis. A U.S. Investor must recapture losses deducted in previous years to the extent that distributions from the Company cause the U.S. Investor’s at risk amount to be less than zero at the end of any taxable year. Losses disallowed to a U.S. Investor or recaptured as a result of these limitations will carry forward and will be allowable to the extent that the U.S. Investor’s tax basis or at risk amount (whichever is the limiting factor) is increased above zero.

In general, each U.S. Investor will be at risk to the extent of the purchase price of its Class B-1 Units, but this will be less than the U.S. Investor’s tax basis in its Class B-1 Units to the extent of the U.S. Investor’s share of any of the Company’s nonrecourse liabilities (other than certain “qualified nonrecourse financing”). A U.S. Investor’s at risk amount will increase or decrease as the adjusted tax basis of the U.S. Investor’s Class B-1 Units increase or decrease except that changes in the Company’s nonrecourse liabilities (other than with respect to certain “qualified nonrecourse financing”) will not increase or decrease the U.S. Investor’s at risk amount.

Investment Interest Expense Deductions. To the extent that the Company has interest expense, a non-corporate U.S. Investor may be subject to the “investment interest” limitations of Code §163(d). Investment interest includes interest paid or accrued on indebtedness incurred or continued to purchase or carry property held for investment, and short sale expenses. Investment interest is not deductible in the current taxable year to the extent it exceeds a taxpayer’s “net investment income,” consisting of net gain and ordinary income from investments in the current year. For the purposes of this limitation, net long-term capital gains are generally excluded from the computation of investment income, unless the taxpayer elects to pay tax on such gains at ordinary income tax rates.

If or to the extent that the limitation on investment interest applies, a non-corporate U.S. Investor could be denied a deduction for all or part of its distributive share of the Company’s interest expenses unless such U.S. Investor had sufficient investment income from all sources, including the Company. In such case, a U.S. Investor that could not deduct such interest expenses currently as a result of the application of this limitation would be entitled to carry such amounts forward to future years, when the same limitation would again apply. The limitations on the deductibility of investment interest would also apply to interest paid by a U.S. Investor on debt incurred to finance its investment in the Company.

Miscellaneous Itemized Deductions. The Company is expected to deemed to be an investor (as opposed to a trader) in securities and other assets. Assuming the Company is deemed to be an investor, the management fee payable by the Company, together with certain other Company expenses, will be treated as miscellaneous itemized deductions of the Company for U.S. federal income tax purposes. Under current law, individual taxpayers and certain trusts or estates are not permitted to deduct expenses that would be treated as miscellaneous itemized deductions. If the Company is deemed to be a trader in securities and other assets, the above limitations generally will not apply.

Passive Activity Losses. The passive activity limitations of Code §469 apply to individuals, trusts, estates, personal service corporations, and certain closely-held C corporations. In general, these rules limit the deductibility of losses from passive activities (which generally include losses attributable to a trade or business carried on as a limited partner) as well as any rental activity or other business activity in which the taxpayer does not materially participate, to the income generated from the taxpayer’s other passive activities. In general, a U.S. Investor may realize passive income or loss from our operations. If a U.S. Investor is subject to these rules, such Investor’s share of passive losses, if any, from the Company’s operations may be used to offset such Investor’s net income (and associated tax liability) from other passive activities. Conversely, such Investor may utilize losses, if any, from its other passive activities to offset his or her passive income, if any, from the Company’s operations. However, any “excess” passive loss from


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the Company’s operations cannot be utilized to offset the U.S. Investor’s income from other sources, such as “active income” (i.e., wages and active trade or business income) or “portfolio income” (i.e., dividend, interest, royalty and annuity income and gains derived from assets producing portfolio income).

If a U.S. Investor’s passive losses exceed its passive income, such excess may not be used to offset such Investor’s other taxable income and must be carried forward to future years to offset passive income recognized in those years under the same rules or upon the disposition in full of such passive interest. Therefore, a U.S. Investor will receive no current tax benefit from the Company’s losses to the extent that such Investor has no passive activity income from other sources during that tax year.

Portfolio income earned by a taxpayer is treated as non-passive income of the taxpayer and cannot be offset by such taxpayer’s passive losses, if any. Consequently, to the extent that the Company generates portfolio income, each U.S. Investor will have an increased tax liability regardless of the amount of passive losses, if any, realized by the Company from its operations. Please note that certain income (including dividend and royalty income) generated by the Company may constitute portfolio income to U.S. Investors.

The passive activity loss rules are applied after other applicable limitations on deductions such as the tax basis limitation and the at risk rules described above.

Limitation on Deductibility of Excess Business Losses. Under current law, taxpayers other than corporations are not permitted to deduct “excess business losses,” very generally defined to be net losses attributable to trades or business of the taxpayer that exceed certain threshold amounts. In the case of partnerships, the limitation is applied at the partner level and each partner must take into account its allocable share of partnership income, gain, deductions and losses from trades or businesses of the partnership for purposes of calculating its excess business loss, if any. The limitation on deductibility of excess business losses is applied after the limitation on passive losses described above. The limitations on deductions of “excess business losses” may limit the deductibility of certain of the Company’s losses. Any losses disallowed as a result of this limitation may be carried forward to future years, subject to certain limitations.

Treatment of Distributions. In the event cash distributions made to a U.S. Investor by the Company exceed such Investor’s adjusted tax basis in his, her or its Class B-1 Units, such Investor must recognize gain equal to such excess. Cash distributions in excess of a U.S. Investor’s adjusted tax basis generally will be considered gain from the sale or exchange of an interest in the Company, which gain may be treated, at least in part, as capital gain. See the discussion below under the heading “Disposition of a Class B-1 Unit.” Please note that any reduction in a U.S. Investor’s share of the Company’s liabilities will be treated as a cash distribution for federal income tax purposes.

Exclusion from Income of Certain Qualified Small Business Investments. In general, if the Company sells or exchanges “qualified small business stock” that it has held for more than five years, a non-corporate Limited Partner may be entitled to exclude from taxable income 100% of the gain from such sale or exchange that we allocate to such Limited Partner. This exclusion will apply to gain allocated to the non-corporate Limited Partner in respect of an interest in the Company that he or she held on the date the Company acquired the “qualified small business stock” and continuously thereafter through the date of our sale or exchange of the “qualified small business stock.” For each non-corporate Limited Partner, the amount of gain eligible for the 100% exclusion generally is limited to the greater of (i) 10 times the Limited Partner’s proportionate share of the Company’s basis in the stock or (ii) a total of $10M with regard to stock in the issuing corporations.

To be treated as small business stock eligible for the above exclusions, stock must have been acquired at original issue from a “qualified small business corporation.” In general, a “qualified small business corporation” is a domestic C corporation that, immediately after issuing the stock in question, has $50M or less in gross assets and satisfies certain other requirements. Because several of these requirements must continue to be satisfied after the issuance of qualified small business stock, it is possible that such stock may cease to so qualify due to events occurring after the issue date. If the Company should sell qualified small business corporation stock at a gain, a Limited Partner that is not a corporation may be eligible for a tax-free rollover of that gain if the Company or that Limited Partner makes a new investment in another qualified small business corporation within 60 days of that sale.

Investments in Non-U.S. Corporations. The Company may make non-U.S. investments, including in non-U.S. pass-through vehicles, and non-U.S. corporations that are treated for federal income tax purposes as “controlled foreign corporations” (“CFCs”) or “passive foreign investment companies” (“PFICs”). Certain non-U.S. investments of the Company, including investments in CFCs or PFICs, may cause a U.S. Investor to recognize taxable income prior to the Company’s receipt of distributable proceeds, pay an interest charge on receipts that are deemed as having been deferred or recognize ordinary income that otherwise would


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have been treated as capital gain. In addition, non-U.S. investments of the Company may also subject U.S. Investors to certain reporting requirements under the Code.

Disposition of a Class B-1 Unit. Upon the sale of Class B-1 Units, a U.S. Investor will recognize gain or loss equal to the difference between such Investor’s “amount realized” and such Investor’s adjusted tax basis in their Class B-1 Units. A U.S. Investor’s “amount realized” will equal the sum of the cash and fair market value of other property received plus the portion of the Company’s nonrecourse liabilities allocated to the Class B-1 Units sold and any Limited Partner recourse liabilities of which the Limited Partner is relieved. If the amount of cash and fair market value of other property received plus the allocable share of the Company’s nonrecourse liabilities and Limited Partner recourse liabilities of which the U.S. Investor is relieved exceeds the U.S. Investor’s adjusted basis with respect to the Class B-1 Units disposed of, such U.S. Investor will recognize gain equal to such excess. The tax liability resulting from such gain could exceed the amount of cash received upon the disposition of such Class B-1 Units. To the extent that a portion of the gain upon the sale of Class B-1 Units is attributable to a U.S. Investor’s share of the Company’s “inventory items” and “unrealized receivables,” as those terms are defined in Code §751, such portion will be treated as ordinary income. Unrealized receivables include (i) to the extent not previously includable in the Company’s income, any rights to pay for services rendered or to be rendered and (ii) amounts that would be subject to recapture as ordinary income if the Company had sold its assets at their fair market value at the time of the transfer of such Units.

Capital gain or loss recognized by an individual U.S. Investor on the sale or exchange of a Unit held for more than 12 months will be long-term capital gain or loss for United States federal income tax purposes. All other gains will be taxed at ordinary income rates. A U.S. Investor’s ability to deduct capital losses may be severely limited.

If a U.S. Investor sells or otherwise disposes of a Class B-1 Unit prior to the end of a taxable year in which we have net income, such Investor will be liable for the income taxes due on its proportionate share of the net income attributable to such Unit for that period ending on the date of disposition, even though the Limited Partner may not have received any cash distributions.

Timing of Admission. Under the Offering, LPs will be joining the Company up until December 31, 2020 unless otherwise dictated by the GP. The Code provides that if, during a year, there is a change in a partner’s interest in a partnership, each partner’s distributive share of any item of income, gain, loss, deduction or credit must be determined using any method prescribed by Treasury Regulations which takes into account the varying interests of the partners during the taxable year.

In general, the Treasury Regulations under Code §706 permit the interim closing of our books or the use of a proration method. The proration method may be based on either (i) the portion of the Company’s taxable year that elapses prior to the change in interest; or (ii) any other reasonable method. An allocation method that would allow a Limited Partner to be allocated losses attributable to the time prior to its admission would likely be considered unreasonable. The LPA allows the GP to use any permissible method under Code §706 and the Treasury Regulations thereunder in allocating tax items for any period, including periods before and after the admission of a new Limited Partner.

Each potential Limited Partner should consult its own tax advisor regarding the application of the varying interest rule to the timing of his, her or its potential investment.

U.S. Tax Reports. The Company will provide each Limited Partner with the information required to report its allocable share of the Company’s tax items for U.S. federal income tax purposes. Limited Partners will be furnished information on Schedule K 1 for preparation of their respective U.S. federal income tax returns. The furnishing of such information is subject to, among other things, the timely receipt by the Company of information from Portfolio Companies in which it invests. Thus, the receipt of such information by a Limited Partner may be significantly delayed beyond the date on which a Limited Partner’s tax return is due. Accordingly, Limited Partners should expect that they will need to obtain extensions of time to file their tax returns to the extent that they are able to do so under applicable law, and Limited Partners may need to amend returns.

Additional Reporting Obligations. The Company may engage in transactions or make investments that would subject the Company, its Investors and/or its advisors to special rules requiring such transactions or investments by the Company or investments in the Company to be reported and/or otherwise disclosed to the IRS. A transaction may be subject to reporting or disclosure if it is described in any of several categories of transactions, which include, among others, transactions that result in the incurrence of a loss or losses exceeding certain thresholds. In addition, a Limited Partner may have disclosure obligations with respect to its interest in the Company if the Limited Partner (or the Company in certain cases) participates in a reportable transaction. Significant penalties may apply for failure to comply with these rules. Investors should consult their own tax advisors about their obligation to report or disclose to the IRS


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information about their investment in the Company and participation in the Company’s income, gain, loss or deduction with respect to transactions or investments subject to these rules. The Company may provide to its advisors identifying information about the Company’s investors and their participation in the Company and the Company’s income, gain, loss or deduction from those transactions or investments, and the Company or its advisors may be required to disclose this information to the IRS.

Limited Partners may be subject to substantial penalties if they fail to comply with special information reporting requirements with respect to their investment in the Company, which may include, in the case of an individual Limited Partner, disclosure on Form 8938 with respect to an interest in a “specific foreign financial asset.” Also, Limited Partners that are considered to own stock in foreign corporations that are owned by the Company, including PFIC, may be subject to special information reporting requirements. Substantial excise taxes and penalties may also be imposed on certain tax-exempt Limited Partners (and, in some cases, their managers) that are directly, or in some cases indirectly, parties to certain types of reportable transactions and that fail to comply with special information reporting requirements.

Tax Returns, Elections & Audits. The GP will have the authority to decide how to report the Company’s partnership items on the Company’s tax returns. It is possible that the IRS may not agree with the manner in which the Company’s partnership items have been reported.

The Code provides for optional adjustments to the basis of the Company’s property upon distributions of property to a U.S. Investor and transfers of Units (including by reason of death), provided that an election has been made pursuant to Code §754. Under the LPA, the GP, in its discretion, may cause the Company to make such an election. Any such election, once made, cannot be revoked without the IRS’s consent. Adjustments may be mandatory under certain circumstances and could affect the amount of a U.S. Investor’s distributive share of gain or loss recognized by us on a disposition of our assets. The GP can request from any Limited Partner such information as the GP deems necessary to enable the GP to make such mandatory adjustments for the Company.

The GP, in its capacity as the “tax matters partner” or “partnership representative” under the new partnership audit rules described below, has considerable authority to make decisions affecting the tax treatment and procedure rights of all U.S. Investors, including coordination of any tax proceedings and providing any required notices to U.S. Investors. It also has the authority to bind certain U.S. Investors to settlement agreements and to extend the statute of limitations relating to all U.S. Investors’ tax liabilities with respect to the Company’s partnership items.

New Partnership Audit Rules. Recently enacted legislation will significantly change the rules for U.S. federal income tax audits of partnerships such as the Company. The new rules will apply to taxable years of a partnership beginning on or after January 1, 2018 unless the partnership elects to have the new regime apply before such time. Under the new rules, adjustments to partnership items will generally be determined at the entity-level, and a partnership may be required to pay taxes (and associated interest and penalties and other charges) imposed as a result of such adjustments. In certain cases, a partnership may be able to elect to have the tax and associated amounts collected at the partner level. In the event of an audit, these new rules, and any elections thereunder, may significantly affect the amount and timing of tax (and associated interest and penalties and other charges) that is required to be borne by the Company and the Limited Partners as well as the manner in which such amounts are allocated among the Limited Partners (including former Limited Partners). A Limited Partner may bear more tax under the new rules than he, she or it would have under the former regime. There is substantial uncertainty regarding the interpretation and implementation of these new rules, including in the tiered partnership context, and the Treasury Department is expected to promulgate Treasury regulations or other guidance that will affect their application. Limited Partners should consult their own tax advisers regarding possible implications of these new rules.

Surtax on Unearned Income. Code §1411 imposes a 3.8% surtax on the “net investment income” of certain U.S. persons who are citizens and resident aliens, and on the undistributed “net investment income” of certain U.S. estates and trusts. Among other items, “net investment income” generally would include a U.S. Investor’s allocable share of the Company’s net gains and certain other income such as interest and dividends, less deductions allocable to such income. In addition, “net investment income” may include gain from the sale, exchange or other taxable disposition of an interest in the Company, less certain deductions. Prospective investors should consult their own advisors concerning its potential applicability to their individual circumstances.

Tax-Exempt U.S. Investors If an entity exempt from taxation under Code §501 (a “tax-exempt entity”) is a partner in a partnership which is engaged in a trade or business not substantially related to the tax-exempt entity’s tax-exempt function, the tax-exempt entity will be subject to unrelated business income tax (“UBIT”) on its distributive share of such income (other than dividends, interest, royalties, certain rents, capital gains and certain other items).


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In addition, if a tax-exempt entity is a partner in a partnership that owns property acquired with borrowed funds, or if the tax-exempt entity borrows to fund its investment in the partnership, the tax-exempt entity’s distributive share of partnership income (including dividends, interest, royalties, rents, and capital gains) attributable to such property may be subject to UBIT. Income allocated to an investor through one or more tiers of pass-through entities may also be subject to UBIT if any such entity is engaged in an unrelated trade or business or borrows to acquire property.

The Company expects to generate income that will be subject to UBIT if certain of its income is deemed to be derived from a trade or business. In addition, because the Company expects to use acquisition indebtedness to acquire Portfolio Companies, it expects to generate income subject to UBIT from such activities.

Each prospective tax-exempt investor is urged to consult with its own tax advisors regarding the federal, state, local and other tax treatment of its investment in the Company. Charitable remainder trusts (including remainder unitrusts) (together, “CSITs”), face adverse tax consequences if they invest in entities that generate income subject to UBIT. Because the Company is expected to realize income that will be subject to UBIT, CSITs (or trusts that may convert into CSITs in the future) should consult with their tax advisors before investing in the Company.

Non-U.S. Investors This Memorandum does not address the federal, state, local or foreign tax consequences to Non-U.S. Investors. Non-U.S. Investors should consult their own tax advisors as to the consequences of an investment in the Company.

FATCA Compliance Very generally and with limited exceptions, pursuant to Sections 1471 through 1474 of the Code as modified by U.S. Treasury regulations, any relevant intergovernmental agreements entered into pursuant thereto, implementing non-U.S. laws and regulations, any other associated guidance, and subject to further guidance (collectively, “FATCA”), each Limited Partner will be required to provide certain information to the Company to demonstrate that the Limited Partner qualifies for an exemption from FATCA, has a valid agreement in effect with the Secretary of the Treasury to comply with certain information, diligence and/or reporting requirements that are mandated by FATCA, or otherwise complies with the rules as provided in FATCA. If a Limited Partner fails to satisfy these requirements, certain U.S. source income paid to such Limited Partner will, in general, be subject to a 30% withholding tax. The U.S. source income with respect to which the withholding applies includes, among other items, interest, whether or not the interest would qualify as “portfolio interest”, dividends, and, beginning on January 1, 2019, gross proceeds realized upon the sale or other disposition of any property which can produce U.S. source interest or dividends. The Company will withhold at a 30% rate on such payments to a Limited Partner if such Limited Partner fails to provide the Company with sufficient information, certifications and documentation necessary for the Company to determine if the Limited Partner is a Non-U.S. Investor or a U.S. Investor and, if it is a Non-U.S. Investor, if it has “substantial United States owners” and/or is in compliance with (or meets an exception from) FATCA requirements. The Company may disclose information provided by a Limited Partner to the IRS or other parties as necessary to comply with FATCA.

The exact scope of the requirements of and exceptions from FATCA remains unclear and potentially subject to material changes as a result of any future guidance, or changes to existing guidance. All investors are urged to consult their own tax advisors about the implications of the new FATCA requirements.

Other Matters Possible Changes in Federal Tax Laws. The statutes and regulations with respect to all of the foregoing tax matters are subject to continual change by Congress or the Treasury Department. Similarly, interpretations of these statutes and regulations may be modified or affected by judicial decision, the IRS or the Treasury Department. Any such change may have an effect on the discussion above.

State & Local Taxes. In addition to the federal income tax consequences described above, prospective Limited Partners should consider potential state and local tax consequences of an investment in the Company. State and local laws often differ from U.S. federal income tax laws with respect to the treatment of specific items of income, gain, loss, deduction and credit. The Company may be subject to state and/or local tax, depending on the location and scope of the Company’s activities. In addition, a state in which a Limited Partner is not a resident but in which the Company may be deemed to be engaged in business may impose a tax and a tax return filing obligation on that Limited Partner with respect to his, her or its share of the Company’s income derived from that state. Under some circumstances, a Limited Partner with tax liabilities to more than one state may be entitled to a deduction or credit for taxes paid to one state against


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the tax liability to another. Prospective Investors should consult their own tax advisors for further information about state and local taxes that may be incurred in connection with an investment in the Company.

Non-U.S. Taxes. The Company may be subject to withholding and other taxes imposed by, and Limited Partners (including Non-U.S. Investors and tax-exempt organizations) might be subject to taxation and reporting requirements in, non-U.S. jurisdictions in which the Company makes investments. It is possible that tax conventions between such countries and the United States (or another jurisdiction in which a Non-U.S. Investor is a resident) might reduce or eliminate certain of such taxes, or that in some cases taxable Limited Partners might be entitled to claim foreign tax credits or deductions with respect to such taxes, in each case as provided by applicable law.

Consultation with Advisors. The summary of federal income tax consequences in this Memorandum is not intended to be a complete summary of the tax consequences of this investment and is not intended as a substitute for careful tax planning. The applicability of the tax laws to Investors will vary from one Investor to another, depending upon each Investor’s tax situation. Accordingly, each prospective Investor is advised to consult with his or her own attorneys, accountants and other personal tax advisors as to the effect on his or her own tax situation of a purchase and ownership of Class B-1 Units and as to the effect of recent, pending and potential changes in the applicable law.

CERTAIN ERISA CONSIDERATIONSIn considering an investment in the Company of a portion of the assets of a qualified employee benefit plan that is subject to ERISA (an “ERISA Plan”), a fiduciary for such plan, taking into account the facts and circumstances of such qualified plan, should consider, among other things:

(1) whether the investment is in accordance with the documents and instruments governing such ERISA Plan;

(2) the definition of plan assets under ERISA;

(3) whether the investment satisfies the diversification requirements of ERISA §404(a)(1)(C);

(4) whether, under ERISA §404(a)(1)(B), the investment is prudent, considering the nature of an investment in and the compensation structure of the Company and the fact that there is not expected to be a trading market created in which the fiduciary can sell or otherwise dispose of the Units;

(5) that the Company has had no history of operations; and

(6) whether the Company or any Affiliate is a fiduciary or a party in interest or a disqualified person to the ERISA Plan.

The prudence of a particular investment must be determined by the responsible fiduciary with respect to each qualified plan, taking into account all of the facts and circumstances of the investment.

ERISA provides that Units may not be purchased by an ERISA Plan subject to ERISA if the Company is a “fiduciary” or “party in interest” (as defined in ERISA §§3(21) and 3(14)) to the plan unless such purchase is exempt from the prohibited transaction provisions of ERISA §406. Under ERISA, it is the responsibility of the fiduciary responsible for purchasing the Units not to engage in a non-exempt prohibited transaction.

Code §4975 has similar prohibited transaction restrictions applicable to transactions between disqualified persons and ERISA Plan or IRAs. If a prohibited transaction occurs, excise taxes, damages and other penalties may apply. In addition, in the case of an individual retirement account that engages in a prohibited transaction involving the IRA owner or a related party, the IRA could be disqualified and the entire value of the IRA could be taxable to the IRA owner.

The DOL has promulgated regulations (“DOL Regulations”), 29 C.F.R. Section 2510.3-101 (as modified or deemed to be modified by ERISA §3(42)), that define what constitutes “Plan Assets” in a situation in which a qualified plan invests in a limited partnership or other entity. If assets of the Company are classified as Plan Assets, the General Partner would be a fiduciary under ERISA with respect to the Company and significant penalties discussed above could be imposed under certain circumstances.

Under the DOL Regulations, if an ERISA Plan invests in an equity interest of an entity that is neither a publicly offered security nor a security issued by an “investment company” registered under the 1940 Act, its assets include both the equity interest and an undivided interest in each of the underlying assets of the entity (i.e., the entity will be deemed to hold Plan Assets), unless it is established that either (i) the entity is an “operating company” or (ii) the entity satisfies the “less-than-25% exception” described below.


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Since the Units will not qualify as publicly-offered securities and will not be issued by an “investment company” registered under the 1940 Act, our assets will avoid being classified as Plan Assets only if either (i) we are an “operating company” or (ii) we qualify for the less-than-25% exception.

The term “operating company” is defined in the DOL Regulations as an entity that is primarily engaged, either directly or through one or more majority-owned subsidiaries, in the production or sale of a product or service other than the investment of capital. The term “operating company” also includes an entity that is a “venture capital operating company” (a “VCOC”) as defined in the DOL Regulations. Under the DOL Regulations, an entity is a VCOC if at least 50% of its assets, valued at cost, are invested in “venture capital investments.” A “venture capital investment” is an investment in an operating company (other than a VCOC) as to which the investor has or obtains management rights. In addition, to qualify as a VCOC the entity must exercise certain management rights with respect to at least one of its venture capital investments at least annually in the ordinary course of business. For purposes of meeting the requirements, the term “management rights” means contractual rights directly between the investor and an operating company to substantially participate in, or substantially influence the conduct of, the management of the operating company. Determining what management rights will work to satisfy the regulation is a factual question and will depend on the specific circumstances of each investment. The DOL has provided some clarity as to what will qualify as sufficient management rights. Specifically, the DOL has described management rights by example, indicating that the right to appoint a director would qualify as management rights sufficient to satisfy the definition in the regulation. Other management rights, such as the right to consult with and advise the management of the operating company, the right to inspect the operating company’s properties and the right to receive financial information, may, together with other rights, constitute “management rights” for this purpose.

The GP intends to operate the Company so that it will either satisfy the definition of a VCOC or satisfy the less-than-25% exception. If we are classified as a VCOC, we should not be treated as holding the Plan Assets. However, because this determination involves questions of fact regarding future activities, complete assurance on this issue cannot be provided.

If we do not qualify as a VCOC under DOL Regulations, we will nevertheless avoid being treated as holding Plan Assets if we qualify for the less-than-25% exception. An entity will qualify for that exception if, immediately after the most recent acquisition, transfer or redemption of any equity interest in the entity, “benefit plan investors” hold less than 25% of the total value of each class of interest in the entity. Under the DOL Regulations, “benefit plan investors” are defined as (i) employee benefit plans subject to ERISA, (ii) IRAs and similar plans and accounts that are subject to Code §4975, and (iii) entities or accounts that are deemed to hold the Plan Assets of such plans or accounts. For purposes of the 25% calculation, interests in the Company held by the GP or any of its affiliates (other than benefit plans) will be disregarded. We do not intend to prevent the sale of Units to benefit plan investors, including IRAs, and cannot provide any assurance that equity participation in the Company by benefit plan investors will not equal or exceed 25%.

If we are deemed to hold Plan Assets, anyone with discretionary authority with respect to our assets could become a “fiduciary” of the ERISA Plan investors within the meaning of ERISA. As a fiduciary, such person would be subject to prudent investment and diversification standards. In addition, if we are deemed to hold Plan Assets, investment in the Company by an ERISA Plan might constitute an improper delegation of fiduciary responsibility to the GP and expose the fiduciary of a qualified plan investor to co-fiduciary liability under ERISA for any breach by the GP of its ERISA fiduciary duties. We could also be found to have engaged in a non-exempt “prohibited transaction,” with the consequences described above.

Fiduciaries of plans subject to ERISA are required to determine annually the fair market value of the assets of such plans as of the close of the plan’s Fiscal Year. Also, IRA custodians are required to report the value of the assets in an IRA annually. Although the GP will provide annually an estimate of the value of the Units based upon, among other things, the book value of the Company, it may not be possible to precisely value the Units from year to year, because there will be no market for them. Accordingly, there can be no assurance that the valuation information provided will satisfy the annual valuation requirements applicable to ERISA Plans and to IRAs.

Benefit plan investors may be required to report certain compensation paid by the Company to the Company’s service providers as “reportable indirect compensation” on schedule C to the Form 5500 Annual Return (the “Form 5500”). To the extent any compensation arrangements described herein constitute reportable indirect compensation, any such descriptions are intended to satisfy the disclosure requirements for the alternative reporting option for “eligible indirect compensation,” as defined for purposes of Schedule C to Form 5500.


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The DOL has promulgated a final regulation (the “ERISA Investment Advice Regulation”), which re-defines the circumstances under which a person will be considered a fiduciary for purposes of ERISA and Section 4975 of the Code by virtue of providing investment advice to a benefit plan subject to ERISA or a plan subject to Section 4975 of the Code (a “Covered Plan”). Under the ERISA Investment Advice Regulation, a person who makes a “recommendation” regarding the acquisition, holding or disposition of any securities or investment property or the management of securities or investment property and receives direct or indirect fees or other compensation as a result of dealing with a Covered Plan, plan participant or beneficiary, plan fiduciary or IRA owner, is generally considered a fiduciary unless an exemption applies. One such exemption is for advice rendered to certain independent fiduciaries with financial expertise, including certain banks, insurance carriers, investment advisers, broker-dealers and independent fiduciaries (excluding IRA owners) that hold, or have under management or control, total assets of at least $50 million. The General Partner and its respective affiliates (the “Manager Parties”) do not intend to act as fiduciaries under the ERISA Investment Advice Regulation with respect to any Covered Plan’s decision to invest in the Fund and no information or communication from any Management Party (either alone or in conjunction with any other information of communication) should be construed as a recommendation within the meaning of the ERISA Investment Advice Regulation. Notwithstanding this intention, any and all information provided herein (or provided by any Manager Party prior to or subsequent to the delivery of this Memorandum, including following the closing of any investment in the Fund by a Covered Plan) to any Covered Plan or any Covered Plan fiduciary that is determined to constitute “investment advice,” or a “recommendation,” within the meaning of the ERISA Investment Advice Regulation is provided solely on the basis that the recipient is, or is represented by, an independent fiduciary that satisfies the criteria set forth in 29 C.F.R. § 2510.3-21(c)(1). The information provided herein is intended to be used solely by the recipient in considering the investment opportunity described herein and may not be used for any other reason, personal or otherwise. The scope and applicability of the ERISA Investment Advice Regulation and related exemptions may change further; Covered Plan fiduciaries are advised to keep themselves informed.

Plans sponsored by state and local governments, foreign plans and certain church plans generally are not subject to ERISA. However, such plans may be subject to other laws or regulations that are similar to ERISA (“Similar Laws”). Advisors to such plans should take into account the requirements of such Similar Laws.

ERISA and its accompanying regulations are complex and, to a great extent, have not been interpreted by the Courts or the administrative agencies. This discussion does not purport to constitute a thorough analysis of ERISA.

Prospective Investors that are subject to the provisions of ERISA, Code §4975 or Similar Laws are urged to consult their own advisors with specific reference to their own situations and the application of ERISA, the Code, or Similar Laws to an investment in the Company.

INVESTOR QUALIFICATION AN INVESTMENT IN THE CLASS B-1 UNITS IS SUITABLE ONLY FOR INVESTORS OF SUBSTANTIAL FINANCIAL MEANS WHO HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT.

The Units have not been and will not be registered under the 1933 Act (irrespective of whether the Units are ever registered under the 1934 Act), or any state or other securities laws, and will be offered and sold for investment only to qualifying recipients of this Memorandum under the exemption from the registration requirements of the 1933 Act provided by Regulation D promulgated thereunder and in compliance with any applicable state or other securities laws.

In order to be eligible to invest in the Company (an “Eligible Investor”), Investors must certify in the Subscription Agreement that they qualify as an Accredited Investor and are purchasing for their own account or one or more accounts with respect to which they exercise sole investment discretion.

Accordingly, offers and sales of Units will be made only to prospective Investors who satisfy, among other things, the following eligibility requirements:

1. On the basis of its financial situation and needs, the Investor must confirm and represent that it has the ability to bear the economic risks of the investment in the Company, including the risk of loss of the Investor’s entire investment;

2. The Investor must confirm and represent that the Investor, either alone or with its personal representative(s), is sophisticated and has sufficient knowledge and experience in financial, business and investment matters so that it is or they are capable of evaluating the merits and risks of the prospective investment;


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3. The Investor must confirm and represent that the Units are being acquired for investment purposes and not with a view to distribution or resale;

4. The Investor must confirm and represent that the Investor is an Accredited Investor;

5. The Investor must confirm its identity and the identity of its beneficial owners (if applicable) in a manner sufficient to ensure compliance by the Company and the GP with the Patriot Act; and

6. The Investor must make certain other representations to us including representations as to the information described in items 1 - 5 above, as well as to the Investor’s access to information concerning the Company and the Investor’s ability to bear the economic risk of the investment and net worth.

The GP reserves the right to reject subscriptions, in whole or in part, in its discretion. Each purchaser will be required to represent that such purchaser’s overall commitment to investments which are not readily marketable is not disproportionate to such purchaser’s net worth, and that such purchaser’s acquisition of Units will not cause such overall commitment to become excessive; that such purchaser can sustain a complete loss of such purchaser’s investment in the Units and has no need for liquidity in such purchaser’s investment in the Units; and that such purchaser has evaluated the risks of investing in the Units.

LPs may not be able to liquidate their investment in the event of an emergency or for any other reason because there is not now any public market for the Units and none is expected to develop. We will establish and maintain on our books a Capital Account for each LP, into which its Capital Contribution(s) will be credited and in which certain other transactions will be reflected.

The GP will maintain a list of the LPs, which is available for an inspection by a requesting LP who is not a FINRA-registered representative. Such inspection by a Limited Partner will be available so long as it comports with state and federal disclosure and confidentiality rules. The GP may, without the consent of the existing LPs, admit new LPs. The GP may reject a subscription for a Unit for any reason in its sole and absolute discretion. If a subscription is rejected, the payment remitted by the Investor will be returned without interest.

EACH PROSPECTIVE INVESTOR SHOULD CONSIDER WHETHER THE PURCHASE OF THE UNITS IS SUITABLE FOR HIM OR HER IN LIGHT OF HIS OR HER INDIVIDUAL INVESTMENT OBJECTIVES.

Accredited Investor To be eligible to subscribe for Units, each Investor who is in the United States or who is a U.S. Person must meet one of the definitions of Accredited Investor provided in Rule 501(a) of Regulation D and as described in the Subscription Documents.

The definition of “Accredited Investor” provided in Rule 501(a) includes, among others:

(a) a natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (provided that for this purpose, (i) “net worth” means the excess of total assets at fair market value, including home furnishings and automobiles, over total liabilities; (ii) the Investor may not count the value of his / her primary residence in net worth, and if the amount of debt on the Investor’s primary residence exceeds its value, the Investor must count the excess against net worth; and (iii) the Investor does not need to count as a liability debt secured by the Investor’s primary residence up to the value of the residence, unless the amount of such debt exceeds the amount that was outstanding 60 days prior, other than debt resulting from the acquisition of the primary residence);

(b) a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(c) any corporation, partnership, limited liability company or business trust not formed for the specific purpose of acquiring the Units with total assets exceeding $5,000,000;

(d) any trust, with total assets in excess of $5,000,000 not formed for the specific purpose of acquiring the Units, whose purchase is directed by a sophisticated person;

(e) an entity in which all of the equity owners are Accredited Investors;

(f) any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees with total assets in excess of $5,000,000;


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(g) any employee benefit plan within the meaning of ERISA, if the investment decision is made by a plan fiduciary, as defined in ERISA §3(21), which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors; and

(h) an IRA as defined in Code §408(a) owned by and for the benefit of an Accredited Investor.

PLAN OF PRIVATE PLACEMENT Description of the Offering We intend to offer $1,500,000,000 of Units. We presently intend to conduct the Offering and receive subscriptions for Units on an ongoing basis until the earlier of (i) the date the GP determines, in its discretion, to discontinue the Offering, or (ii) the date we have received subscriptions for $1,500,000,000 of Units. In any event, the Offering will terminate no later than the close of business on December 31, 2020 unless that date is extended by the GP in its discretion up to two one-year periods. The GP may, in its discretion, elect to temporarily or permanently suspend the Offering.

The minimum initial Capital Contribution is $50,000, subject to reduction or waiver at the GP’s sole discretion. Units must be purchased for cash at time of subscription, though the GP may accept subscriptions under which a portion of the offering price is not paid in full upon execution and delivery of the Subscription Agreement. The GP, or one or more of its affiliates, may invest as LPs in the Company. All subscriptions tendered by investors are subject to acceptance by the GP, and we reserve the right to reject or reduce any subscription for any reason prior to acceptance. Subscriptions rejected by us will be returned to the subscriber without interest. Except as otherwise permitted by the GP, in its sole discretion, Units may be purchased as of the first business day of any calendar month.

Conduct of the Offering The Units are being offered on a “best efforts” basis, which means generally that broker-dealers will be required to use only their best efforts to sell the Units and have no commitment or obligation to purchase any of the Units.

We may agree to indemnify members of the Selling Group against certain liabilities, including liabilities under federal and state securities laws, or to contribute to payments that they may be required to make in respect of those liabilities.

The Offering is made only by means of this Memorandum. No certificates will be issued for Units. Investors will, however, receive written confirmation of their investment in the Company.

How to Subscribe To purchase Units, a new subscriber must (i) review this Memorandum and the LPA (ii) complete, execute and deliver to us the Subscription Documents and (iii) arrange for payment of the amount of the subscription in accordance with the instructions in the Subscription Documents. We may subsequently also request IRS Form W-9 and/or the Investor’s Taxpayer Identification Number. Prospective Investors whose subscriptions have been accepted by the GP will be notified of their acceptance into the Company. Generally, existing Limited Partners subscribing for additional Units need only update information in the Subscription Documents that may have changed. The GP reserves the right to accept or reject, in its sole discretion, subscriptions in whole or in part, and to close the subscription books at any time without notice.

By subscribing for Units, you confirm that you meet the suitability standards for purchasers of Units and agree to be bound by all of the terms of the Subscription Agreement attached as a part of the Subscription Documents and the LPA. The Subscription Agreement contains, among other things, representations and warranties of the subscribing LPs.

We generally must receive Subscription Documents and cleared funds in payment therefore prior to the applicable Monthly Closing Date. Subscription funds must generally be credited to our account at least three business days prior to the requested Monthly Closing Date in order for a subscription to be accepted (except as otherwise determined by the GP in its discretion).

All subscriptions that are accepted by the GP will be credited to us only on the first business day of each calendar month (except as otherwise provided by the GP in its discretion). Subscriptions for cash that are received but not credited to us will be deposited in an interest-bearing account selected by the GP.


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RESTRICTIONS ON TRANSFER OF UNITS An Investor’s rights to sell or transfer Units are limited—both under the LPA and under the Code. There is no public market in which you may sell your Units and we do not expect a public market to develop in the future. You may sell or transfer your Units only using a form approved by us and must obey all relevant laws if you are permitted to transfer Units. Any person who buys Units from a Limited Partner must meet the investor suitability requirements imposed by us and applicable law.

No transfer of a Unit made under the foregoing will relieve the LP of any obligation that has accrued or was incurred before the transfer. A transferee of a Unit or a person who has become entitled to a Unit by operation of law but has not complied with the transfer provisions referred to above has no right to access or to be provided with any information with respect to our affairs and has only the rights accorded to such transferees under applicable Delaware law. A transfer of a Unit will be deemed to take effect on the date that the GP records such transfer, which will typically be recorded on a monthly basis.

The GP (or any affiliate thereof) may buy Units for their account or facilitate transfers of Units between LPs and others. Any transfer facilitated by the GP (or any affiliate thereof) will be subject to the foregoing restrictions on transfer to the same extent as if the GP (or any affiliate thereof) had not been involved.

LPA Transfer Restrictions All transfers of Units must receive the GP’s written consent, which may be granted or withheld at the GP’s sole discretion, and must comply with the LPA. In no event may Units be transferred unless all of the following conditions are satisfied or waived by the GP:

(i) the transferor or transferee has delivered to the GP an opinion of counsel reasonably acceptable to the GP that the transfer would not (a) require registration under the 1933 Act or any state securities laws, or (b) adversely affect the status of the Company as a partnership for federal income tax purposes, cause us to become a PTP or cause us to have to register as an investment company under the 1940 Act;

(ii) any required third-party consent or approval to the transfer has been obtained or waived, including the consent of any lender providing financing to us to the extent required;

(iii) the GP is satisfied that the transfer, when considered in the aggregate with all other transfers of Class B-1 Units within the preceding 12-month period, would not result in the Company being considered to have terminated within the meaning of Code §708;

(iv) the GP is satisfied that the transfer will not result in the Company being considered a PTP;

(v) the GP has received an agreement in form and substance satisfactory to it that the transferee agrees to be bound by the terms and conditions of the LPA and making such representations and warranties as the GP determines to be advisable and in our best interest;

(vi) the transferor or transferee bears all costs and expenses of the transfer and the transferor’s admission to the Company, including our actual and reasonable legal fees; and

(vii) the transferor and the transferee execute, acknowledge and deliver to us such other certificates, instruments and documents as the GP deems reasonably necessary, appropriate or desirable to effect the transfer or the transferee’s admission to the Company.

Code Transfer RestrictionsAs discussed above under “Certain Tax, ERISA & Regulatory Matters—Certain Tax Considerations—Classification as a Partnership,” the Company is organized as a Delaware limited partnership and as such, the Code limits the number of Units which may be transferred in any Fiscal Year generally to 2.0% of our outstanding Units. If more than 2.0% of our Units are transferred in a Fiscal Year, we could be treated as a PTP under the Code and would be accordingly taxed as a corporation. The Code does provide that certain transfers are not included in the 2% limitation, such as:

• Transfers in which the basis of the Units in the transferee is determined, in whole or in part, by reference to its basis in the hands of the transferor or is determined under Code §732;

• Transfers at death, including transfers from an estate or testamentary trust;

• Transfers between members of a family as defined in Code §267(c)(4);

• Transfers from retirement plans qualified under Code §401(a) or an IRA; and


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• “Block transfers.” A block transfer is a transfer by a Limited Partner and any related persons as defined in the Code in one or more transactions during any 30 calendar day period of Units that in the aggregate represents more than 2% of the Units.

Transfers through a QMS are also disregarded in determining whether Units are readily tradable. A matching service is qualified only if it meets extensive conditions and limitations, and we do not have any plan to utilize a QMS at this time.

The foregoing list does not provide all of the exceptions to the PTP limitations. See “Certain Tax, ERISA & Regulatory Matters—Certain Tax Considerations—Classification as a Partnership” above.

USA PATRIOT ACT COMPLIANCE The Patriot Act requires that some financial institutions implement policies and procedures (“AML Programs”) designed to guard against and identify money laundering activities. Under our own AML Program, we confirm the identity of each Investor to the extent reasonable and practicable, including the principal beneficial owners of an Investor, if applicable. New Investors, and additional capital from existing Investors, can be accepted only after the GP has confirmed the identity of the Investor and the principal beneficial owners of the Investor, if applicable, unless the GP concludes that it can rely on the diligence of a third party with respect to such Investor.

Depending on the circumstances of each proposed subscription, a detailed verification may not be required if (i) the Investor is a recognized financial institution; or (ii) the Investor makes the payment from an account held in the Investor’s name at a recognized financial institution. These exceptions will only apply if the financial institution referred to above is within a country recognized as having sufficient anti-money laundering regulations, such as a member state of the European Union that is subject to the EC Money Laundering Directive or one of the countries that make up the Financial Action Task Force (“FATF”) and that is subject to the FATF recommendations.

If required to verify its identity, an individual may be required to produce a copy of a passport or identification card certified by a notary public. Corporate entities may be required to produce a certified copy of the certificate of incorporation (and change of name), memorandum and articles of association (or equivalent), and the names, occupations, dates of birth, and residential and business addresses of all directors and/or beneficial holders of the applicant’s securities.

The GP reserves the right to request such additional information as is necessary to verify the identity of any person attempting to subscribe to the Company. Pending the provision of evidence satisfactory to the GP as to identity, the closing of a sale of Units to such person may be delayed at the absolute discretion of the GP. If within a reasonable period of time following a request for verification of identity, the GP has not received evidence satisfactory to in its sole discretion, it may refuse to accept the proposed subscription, in which event all subscription monies will be returned without interest to the account from which such monies were originally deposited. Subscription monies also may be rejected by the GP if the remitting bank or financial institution is unknown to the GP.

We may undertake enhanced due diligence procedures prior to accepting Investors the GP believes present high risk factors with respect to money laundering activities. Examples of persons posing high risk factors are persons resident in or organized under the laws of a “non-cooperative jurisdiction” or other jurisdictions designated by the Department of the Treasury as warranting special measures due to money laundering concerns, and any person whose Capital Contributions originate from or are routed through certain banking entities organized or chartered in a non-cooperative jurisdiction.

In addition, we will not accept subscriptions from or on behalf of:

persons on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Asset Control;

the Annex to Executive Order 13224;

such other lists as may be promulgated by law or regulation; and

foreign banks unregulated in the jurisdiction they are domiciled in or which have no physical presence.

We may be required to undertake additional actions to guard against and identify money laundering activities, when final regulations under the Patriot Act are adopted by the Department of the Treasury. The requirements for the GP to guard against and identify money laundering activities in deciding whether to


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accept subscriptions are in addition to the discretion that the GP has in deciding whether to accept subscriptions.

1940 Act Regulation The Company is not registered and does not intend to register as an investment company under the 1940 Act, and, accordingly, investors in the Company are not accorded the protections of the 1940 Act (which, among other matters, requires most registered investment companies to have a majority of disinterested directors, requires securities held in custody at all times to be segregated and marked to clearly identify the owner of such securities, and regulates the relationship between the investment adviser and the investment company).

Our intention to not operate as an investment company will limit our operations in certain ways. For example, since we are not an investment company we may determine to not acquire or dispose of an asset that we would acquire or dispose if we were an investment company, or we may make an acquisition or disposition at a different time, under different circumstances, or in a different manner than would an investment company. If a court or the SEC or its staff provides additional precedent or guidance bearing upon our activities and intention to not operate as an investment company, we may be required to adjust our business strategy accordingly. Any additional legal precedent, including guidance from the SEC or its staff, could provide additional flexibility to us, or it could further inhibit our ability to pursue the business strategies we have chosen.

Any regulatory or other developments could subject us to regulation as an investment company could require us to restructure our business operations, sell certain of our assets or abstain from the purchase of certain assets, which could have an adverse effect on our financial condition and results of operations. Registration under the 1940 Act would require us to comply with a variety of substantive requirements that impose, among other things, limitations on capital structure, restrictions on specified investments; restrictions on borrowings and other leverage and prohibitions on transactions with affiliates.

If the SEC or a court of competent jurisdiction were to find that the we are required to have, but in violation of the 1940 Act had failed to, register as an investment company, possible consequences include, but are not limited to, the following: (i) the SEC could apply to a U.S. district court to enjoin the violation; (ii) we could be subject to lawsuits to recover any damages caused by the violation; and (iii) any contract to which we are a party that is made in, or whose performance involves, a violation of the 1940 Act would be unenforceable by any party to the contract unless a court were to find that under the circumstances enforcement would produce a more equitable result than non-enforcement and would not be inconsistent with the purposes of the 1940 Act. Should we be subjected to any or all of the foregoing, our business would be materially and adversely affected.

Advisers Act Regulation GPB is registered as an investment adviser under the Advisers Act. You are encouraged to review GPB’s Brochure, which is attached to this Memorandum as Exhibit B, to familiarize yourself with GPB’s business and its practices.

Federal Securities Law Regulation We are offering Units to prospective investors in reliance upon an exemption from the registration requirements of the 1933 Act provided in Section 4(a)(2) and Rule 506 promulgated thereunder. As a result, in order to be able to rely on such exemption, we will be obtaining from each prospective Investor certain representations in connection with a subscription for the Units, including that such prospective Investor is acquiring such Units for investment and not with a view to resale or distribution and that it is an Accredited Investor. Further, each Investor must be prepared to bear the economic risk of the investment for an indefinite period, because the Units can be resold only pursuant to an offering registered under the 1933 Act or an exemption from such registration requirement. It is unlikely that the Units will ever be registered under the 1933 Act (irrespective of whether the Units are registered under the 1934 Act).

ADDITIONAL INFORMATION This Memorandum contains references to or summaries of certain provisions of the LPA, the Subscription Documents and certain other documents. All such summaries are qualified in their entirety by reference to said documents, copies of which are included or will be made available (subject to certain limitations and requirements) by GPB upon request, and reference is made to such documents for complete information concerning the rights and obligations of the parties thereto. Those agreements and the various other documents referred to in this Memorandum or included in the appendices are subject to further negotiation or changes. Such negotiations and changes will not, however, result in changes that, in the aggregate, are materially adverse to the Limited Partners.


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GPB has sponsored several programs since its inception to date. Certain of these programs have and may in the future experience adverse developments, which may cause certain investments to perform below expectations. In November 2015, GPB Holdings, LP (“Holdings I”), a GPB sponsored entity with a similar strategy as the Company, purchased a $5,000,000 senior-secured note issued by Insightra Medical Inc. (“Insightra”). In June 2016, Insightra defaulted on its debt, and as a result, Holdings I negotiated a pre-packaged Chapter 11 reorganization process with Insightra emerging from bankruptcy in April 2017, and Holdings I as the sole equity owner and sole senior secured lender. At March 31, 2017, Holdings I’s total investment in Insightra was valued at $4.6M compared to an aggregate cost basis of $6.0M.

In July 2017, GPB initiated a legal action to compel an Automotive Retail operating partner associated with Holdings I and GPB Automotive, LP to comply with the terms of a Master Agreement (“Agreement”) executed in November 2016. GPB contends that the operating partner breached the Agreement by, among other things, failing to use reasonable best efforts to complete agreed-upon dealership buy-sell transactions, as well as failing to comply with the financial terms of the Agreement, which require dealership cash flow and other payments be made to GPB. GPB intends to vigorously pursue enforcement of its rights under the Agreement.

We do not anticipate distributing revised drafts of documents to subscribers for Units prior to the time such subscribers are admitted to a Company as LPs. However, prospective LPs and their authorized representatives are invited to review any such materials from time to time at our offices or to make inquiry of GPB with respect thereto. Information contained herein has been obtained from sources deemed reliable. Such information necessarily incorporates significant assumptions as well as factual matters.

During the course of the Offering, each prospective Investor is invited to examine documents relating to this investment and to ask questions of and obtain additional information from GPB concerning the terms and conditions of the Offering or any other relevant matters (including additional information necessary to verify the accuracy of the information herein) to the extent GPB possesses such information or can acquire it without unreasonable effort or expense.

PRIVACY NOTICE We do not disclose nonpublic personal information about you or former Investors to third parties other than as follows. We collect information about you (such as name, address, social security number, assets and income) from our discussions with you, from documents that you may deliver to us (such as Subscription Documents) and in the course of providing services to you. In order to service your account and effect your transactions, we may provide your personal information to our affiliates and to firms that assist us in servicing your account and have a need for such information, such as GPB, other advisors, financial services provider, accountants or auditors. We do not otherwise provide information about you to outside firms, organizations or individuals except as required or permitted by law. Any party that receives this information will use it only for the services required and as allowed by applicable law or regulation, and is not permitted to share or use this information for any other purpose.

AVAILABILITY OF PRINCIPAL DOCUMENTS We will provide to each prospective Investor and such Investor’s representatives and advisors, if any, copies of the LPA, Subscription Documents and the opportunity to ask questions and receive answers concerning the terms and conditions of this Offering and obtain any additional information which we may possess or obtain without unreasonable effort or expense that is necessary to verify that accuracy of the information furnished to such prospective Investor. Any such questions should be addressed to us at the address indicated below. No other persons have been authorized to give information or to make any representations concerning this Offering, and if given or made, such other information or representations must not be relied upon as having been authorized by us. For additional information regarding the Company, interested investors should contact:

GPB Holdings III, LP c/o: GPB Capital Holdings, LLC

535 West 24th Street, Floor 4 New York, NY 10011

Telephone: (877) 489-8484 Facsimile: (516) 487-0166



$1,500,000,000


GPB HOLDINGS III, LP

January 2018 ________________________________________________________

EXHIBIT A

AGREEMENT OF LIMITED PARTNERSHIP


AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP OF

GPB HOLDINGS III, LP (A Delaware Limited Partnership)

THE LIMITED PARTNERSHIP UNITS (THE “UNITS”) OF GPB HOLDINGS III, LP (THE “PARTNERSHIP”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH UNITS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (i) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (ii) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THE UNITS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP. THEREFORE, PURCHASERS OF THE UNITS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


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TABLE OF CONTENTS

Article 1. GENERAL ...................................................................................................................... 11.1 Organization. ................................................................................................................... 11.2 Name. .............................................................................................................................. 11.3 Certificates and Other Filings. ........................................................................................ 21.4 Offices and Agent. .......................................................................................................... 21.5 Term. ............................................................................................................................... 21.6 Purpose. ........................................................................................................................... 21.7 Powers. ............................................................................................................................ 21.8 Partner Information. ........................................................................................................ 21.9 Ownership. ...................................................................................................................... 3

Article 2. DEFINITIONS................................................................................................................ 32.1 Certain Definitions. ......................................................................................................... 32.2 Other Definitions. ......................................................................................................... 14

Article 3. MANAGEMENT.......................................................................................................... 153.1 Authority. ...................................................................................................................... 153.2 Limitations on Authority............................................................................................... 173.3 Partnership Expenses. ................................................................................................... 183.4 Organization and Offering Expenses. ........................................................................... 193.5 General and Administrative Expenses. ......................................................................... 193.6 Other Fees. .................................................................................................................... 203.7 Certain Activities. ......................................................................................................... 203.8 Other Matters. ............................................................................................................... 213.9 Registrar and Transfer Agent. ....................................................................................... 223.10 Removal. ....................................................................................................................... 223.11 Reliance on Authority of General Partner. ................................................................... 233.12 Parallel Vehicles. .......................................................................................................... 233.13 Blocker Corporations. ................................................................................................... 243.14 Managerial Assistance Fee. .......................................................................................... 253.15 Acquisition Committee. ................................................................................................ 253.16 Advisory Committee. .................................................................................................... 25

Article 4. THE LIMITED PARTNERS ........................................................................................ 264.1 Admission. .................................................................................................................... 264.2 Rights and Duties. ......................................................................................................... 264.3 Meetings. ....................................................................................................................... 274.4 Book-Entry Evidence of Ownership. ............................................................................ 274.5 Joint Holders of Units. .................................................................................................. 27


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4.6 Limited Voting Partners. ............................................................................................... 28Article 5. CAPITALIZATION ..................................................................................................... 28

5.1 Units. ............................................................................................................................. 285.2 Capital Contributions. ................................................................................................... 295.3 Additional Capital Contributions. ................................................................................. 295.4 Return of Capital. .......................................................................................................... 295.5 No Interest on Capital Contributions. ........................................................................... 295.6 Debt Facility.................................................................................................................. 29

Article 6. BOOKS AND RECORDS ............................................................................................ 296.1 Bank Accounts. ............................................................................................................. 296.2 Records. ........................................................................................................................ 306.3 Books and Tax Returns. ................................................................................................ 306.4 Audits. ........................................................................................................................... 306.5 Reports. ......................................................................................................................... 306.6 Tax Elections. ............................................................................................................... 316.7 Partnership Audit Rules. ............................................................................................... 31

Article 7. ALLOCATIONS .......................................................................................................... 327.1 Allocation of Net Profits and Net Losses. .................................................................... 327.2 Authority to Reallocate. ................................................................................................ 337.3 Special Allocations. ...................................................................................................... 337.4 Tax Rules. ..................................................................................................................... 347.5 Other Allocation Rules. ................................................................................................ 35

Article 8. DISTRIBUTIONS ........................................................................................................ 368.1 Amounts. ....................................................................................................................... 368.2 Special Partner Tax Distribution. .................................................................................. 368.3 Priority. ......................................................................................................................... 378.4 General. ......................................................................................................................... 388.5 Tax Withholding. .......................................................................................................... 38

Article 9. REPRESENTATIONS; WARRANTIES; RIGHTS; OBLIGATIONS ....................... 399.1 Representations & Warranties of the General Partner. ................................................. 399.2 Representations & Warranties of the Limited Partners. ............................................... 409.3 Indemnification. ............................................................................................................ 409.4 Inspection Rights. ......................................................................................................... 429.5 Confidentiality. ............................................................................................................. 42

Article 10. TRANSFERS AND WITHDRAWALS ..................................................................... 4510.1 Transfer Limitation. ...................................................................................................... 4510.2 Permissible Transfers. ................................................................................................... 4510.3 Substitute Partner. ......................................................................................................... 46


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10.4 Assignment of the General Partner’s Units. ................................................................. 4610.5 Substitute General Partner. ........................................................................................... 4710.6 Allocations Between Transferor and Transferee. ......................................................... 4710.7 Redemption. .................................................................................................................. 4710.8 Representations Regarding Transfers. .......................................................................... 4810.9 Parties Not Bound to See to Trust or Equity. ................................................................ 4810.10 Compulsory Transfer or Acquisition of Units. ............................................................. 48

Article 11. WINDING UP ............................................................................................................ 4911.1 Events Requiring Winding Up. ..................................................................................... 4911.2 Election to Continue the Partnership. ........................................................................... 5011.3 Winding Up. .................................................................................................................. 5011.4 Rights of Limited Partners. ........................................................................................... 5211.5 Termination of Partnership. .......................................................................................... 5211.6 Waiver of Partition. ....................................................................................................... 5211.7 Negative Capital Accounts. .......................................................................................... 52

Article 12. POWER OF ATTORNEY .......................................................................................... 5212.1 Power of Attorney. ........................................................................................................ 5212.2 Duration of Power. ........................................................................................................ 53

Article 13. MISCELLANEOUS ................................................................................................... 5313.1 Amendments. ................................................................................................................ 5313.2 Complete Agreement. ................................................................................................... 5413.3 Governing Law. ............................................................................................................ 5413.4 Binding Effect. .............................................................................................................. 5413.5 Interpretation. ................................................................................................................ 5413.6 Multiple Counterparts. .................................................................................................. 5513.7 Execution of Documents. .............................................................................................. 5513.8 Reliance on Authority. .................................................................................................. 5513.9 No Third Party Beneficiary. .......................................................................................... 5513.10 Notices. ......................................................................................................................... 5613.11 Waiver. .......................................................................................................................... 5613.12 Liability. ........................................................................................................................ 5613.13 Legal Counsel. .............................................................................................................. 56


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AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF


(A Delaware Limited Partnership)

This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF GPB HOLDINGS III, LP (this “Agreement”) is made and entered into on this 2nd day of January, 2018 (the “Effective Date”), among GPB HOLDINGS III GP, LLC, a Delaware limited liability company (the “General Partner”), the initial limited partner (the “Initial Limited Partner”), GPB H3 SLP, LLC, a Delaware limited liability company, as the special limited partner (the “Special Partner”) and each of the other Persons (defined below) who from time to time have executed Subscription Documents (defined below) that have been accepted by the General Partner as Limited Partners (the “Limited Partners”).

WHEREAS, the Partnership was formed pursuant to a certificate of limited partnership filed with the Secretary of State of the State of Delaware on July 24, 2017 and a Limited Partnership Agreement of the same date (the “Original Agreement”);

WHEREAS, the parties hereto desire to amend and restate the Original Agreement to reflect: (i) the admission of the Limited Partners on the date hereof; (ii) the withdrawal of the Initial Limited Partner on the date hereof; and (iii) the modifications set forth herein.

NOW THEREFORE, in consideration of the mutual covenants herein contained, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Original Agreement hereby is amended, restated, superseded and replaced in its entirety and the parties hereto agree as follows:

ARTICLE 1. GENERAL

1.1 Organization.

The Partners formed the Partnership under the DRULPA (defined below) and other relevant laws of the State of Delaware and in accordance with and subject to the terms and conditions set forth in this Agreement, effective on the commencement of the Partnership as provided in Section 1.5. Except as otherwise provided in this Agreement, the rights and liabilities of the Partners are governed by the DRULPA.

1.2 Name.

The name of the Partnership is “GPB Holdings III, LP.” The General Partner is authorized to make any variations in the Partnership’s name that the General Partner may deem necessary or advisable; provided, however, that the name must contain the words “Limited Partnership” or the letters “L.P.” or “LP” or the equivalent translation thereof.


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1.3 Certificates and Other Filings.

If requested by the General Partner, the Limited Partners must immediately execute all certificates and other documents consistent with the terms of this Agreement necessary for the General Partner to accomplish all filing, recording, publishing and other acts as may be appropriate to comply with all requirements for (i) the formation and operation of a limited partnership under the laws of the State of Delaware, and (ii) if the General Partner deems it advisable, the operation of the Partnership as a limited partnership, or partnership in which the Limited Partners have limited liability, in all jurisdictions where the Partnership proposes to operate.

1.4 Offices and Agent.

The principal office and registered office of the Partnership will be located at 1581 Franklin Avenue, Garden City, NY 11501, or at other places selected by the General Partner after sending notice of that change to the Limited Partners. The registered agent of the Partnership for service of process will be The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, or a substituted agent selected by the General Partner after sending notice of that change to the Limited Partners.

1.5 Term.

The Partnership shall expire upon the earliest of (a) the termination, bankruptcy, insolvency or dissolution of the General Partner (unless a successor general partner has been appointed in accordance with Section 3.10), (b) a determination by the General Partner that the Partnership should wind up or (c) the date the Partnership divests its ownership interest in the last Portfolio Company (the “Partnership Term”).

1.6 Purpose.

The purpose of the Partnership is to engage in any lawful business activities in which limited partnerships formed under the DRULPA may engage or participate. The Partnership expects to focus primarily on acquisitions of interests, whether equity, debt or otherwise, in Portfolio Companies in automotive retail, technology-enabled services, debt strategies and special situations.

1.7 Powers.

The Partnership will be empowered to do any and all acts necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership.

1.8 Partner Information.

The names and addresses of the General Partner and each of the Limited Partners are available at the office of the Partnership. The General Partner will cause the List of Partners to be revised, without the necessity of obtaining the consent of any other Partner, to reflect (i) the admission of any additional or substituted Partner occurring under the terms of this Agreement, (ii) the withdrawal, or partial withdrawal, of any Partner under the terms of this Agreement, (iii) any


3 | LPA

change in the identity or address of a Partner, or (iv) the Capital Contributions and Net Capital Contributions of the Partners occurring under the terms of this Agreement.

1.9 Ownership.

The Unit of each Partner shall be personal property for all purposes. All property and interests in property, real or personal, owned by the Partnership will be deemed owned by the Partnership as an entity, and no Partner, individually, shall have any ownership of such property or interest owned by the Partnership except as a Partner in the Partnership.

ARTICLE 2. DEFINITIONS

2.1 Certain Definitions.

In addition to the terms defined elsewhere in this Agreement, the terms set forth below shall have the following respective meanings:

“1934 Act” means the Securities Exchange Act of 1934, as amended.

“Acquisition Committee” means the Acquisition Committee of the Partnership, as provided in Section 3.15.

“Additional Limited Partners” has the meaning provided in Section 4.1.

“Adjusted Capital Account Deficit” means, with respect to any Partner for any Fiscal Year, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (i) crediting to such Capital Account (A) any amount that such Partner is obligated to restore following the liquidation of such Partner’s Units (under the terms of this Agreement or otherwise) and (B) any amount that such Partner is deemed obligated to restore in accordance with Regulations §§1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and (ii) debiting to such Capital Account the items described in Regulations §§1.704-1(b)(2)(ii)(d)(4), (5), and (6). This definition is intended to comply with the provisions of Regulations §1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith.

“Adverse Effect” means an ownership or proposed ownership of a Unit that, in the opinion of counsel to the Partnership, would cause or be likely to cause (i) the Partnership to be classified as a “publicly traded partnership” within the meaning of Code §7704, (ii) the assets of the Partnership to be considered “plan assets” within the meaning of ERISA, Code §4975 or applicable regulations, (iii) the Units to be required to be registered under the 1934 Act, (iv) the Partnership to register as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), or (v) some other legal, regulatory, pecuniary, tax or material administrative disadvantage to the Partnership or Partners.

“Advisers Act” means the Investment Advisers Act of 1940, as amended from time-to-time, and the rules and regulations promulgated thereunder.

“Advisory Committee” has the meaning provided in Section 3.16(a).


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“Affiliate” means, as to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person, and the term “affiliated” has a meaning correlative to the foregoing. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” means this Agreement of Limited Partnership, as amended, restated, supplemented or otherwise modified from time-to-time.

“Allocation Percentage” means, with respect to each Partner, the percentage specified as such in the List of Partners. The formula for determining such Allocation Percentage means, with respect to any Partner, the quotient obtained by dividing (i) such Partner’s aggregate Capital Contributions by (ii) the Capital Contributions for all Partners, as of such date of determination.

“Ascendant Capital” means Ascendant Capital, LLC, a branch office of Ascendant Alternative Strategies, LLC.

“Average Capital Contribution” means, with respect to each class of Units of any Limited Partner, for a Fiscal Year (i) the sum of such Limited Partner’s twelve Monthly Remaining Capital Contributions with respect to such class of Units calculated for each month in such Fiscal Year, divided by (ii) twelve (12).

“Bad Actor” has the meaning provided in Section 4.6.

“Book Depreciation” means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to the Partnership’s assets for such year or other period for federal income tax purposes, except that if the Gross Asset Value of any asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Book Depreciation with respect to such asset will be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction with respect to such asset for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction with respect to such asset for such year is zero, Book Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

“Capital Account” means, with respect to any Partner, an account that initially has a balance equal to the Net Capital Contribution of such Partner under Section 5.2 and that is increased by (i) the amount of additional cash and the fair market value of any additional property contributed by such Partner to the capital of the Partnership (net of liabilities secured by such contributed property that the Partnership is considered to assume or to take subject to under Code §752), (ii) the amount of any Net Profits allocated to such Partner under Section 7.1, and (iii) the amount of any special allocations of income or gain to such Partner under Section 7.3 and decreased by (A) the amount of money distributed to such Partner by the Partnership, (B) the fair market value of any property distributed to such Partner by the Partnership (net of liabilities secured by such distributed property


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that such Partner is considered to assume or take subject to under Code §752), (C) the amount of any Net Losses allocated to such Partner under Section 7.1, and (D) the amount of any special allocation of deductions or losses to such Partner under Section 7.3. The foregoing Capital Account definition and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulation §1.704-1(b) and will be interpreted and applied in a manner consistent with such Regulations.

“Capital Contribution” means, with respect to any Partner as of any particular date, the amount of money and the initial Gross Asset Value of any property (other than money) contributed, or deemed by the General Partner to have been contributed, by such Partner to the Partnership in accordance with the provisions of this Agreement, and shall be the total amount paid by the Partner to the Partnership prior to reduction by the Partnership’s payment of any Selling Fees with respect to such Capital Contribution.

“Certificate” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Secretary of State of the State of Delaware, as amended from time-to-time in accordance with the terms hereof and the DRULPA.

“Change in Tax Treatment” has the meaning provided in Section 13.1.

“Class A-1 Unit” means, as to any Partner, the Partner’s interest in the Partnership designated as a Class A-1 Unit on the List of Partners, including any and all benefits to which the holder of such interest in the Partnership may be entitled as provided in this Agreement and under the DRULPA, together with all obligations of the Partner to comply with the terms and provisions of this Agreement, as adjusted from time-to-time as provided in this Agreement.




“Class B-1 Unit” means, as to any Partner, the Partner’s interest in the Partnership designated as a Class B-1 Unit on the List of Partners, including any and all benefits to which the holder of such interest in the Partnership may be entitled as provided in this Agreement and under the DRULPA,


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together with all obligations of the Partner to comply with the terms and provisions of this Agreement, as adjusted from time-to-time as provided in this Agreement.

“Class B-2 Unit” means, as to any Partner, the Partner’s interest in the Partnership designated as a Class B-2 Unit on the List of Partners, including any and all benefits to which the holder of such interest in the Partnership may be entitled as provided in this Agreement and under the DRULPA, together with all obligations of the Partner to comply with the terms and provisions of this Agreement, as adjusted from time-to-time as provided in this Agreement.



“Closing” has the meaning provided in Section 4.1(b).

“Code” means the United States Internal Revenue Code of 1986, as amended from time-to-time, and any successor statute.

“Commissions” means cash fees paid on behalf of purchasers of Class A-1 Units, as determined by the General Partner, to broker-dealers, certain employees, officers and directors of Ascendant Capital, and/or an Affiliate of the Partnership for assisting with the marketing of the Private Placement, as determined by the General Partner, a substantial portion of which may be paid or reallowed on a non-accountable basis. The Commissions will be payable with respect to such Capital Contributions upon acceptance by the Partnership of an investor’s subscription and will be subtracted from such Capital Contributions. The General Partner may, in its sole discretion, reduce, waive or calculate differently Commissions with respect to any Limited Partner, including Limited Partners that are members, Affiliates or employees of the General Partner, members of the immediate families of such persons and trusts or other entities for their benefit, as well as Limited Partners (such as other funds) that charge management or similar fees to their investors.

“DRULPA” means the Delaware Revised Uniform Limited Partnership Act, as amended from time-to-time (or any corresponding provisions of succeeding law).

“Effective Date” has the meaning set forth in the Preamble.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time- to-time, and any successor statute.

“Fair Market Value” means the proportionate share of the fair market value of the assets of the Partnership with respect to a Partner’s Unit as of the date of determination. In determining the fair


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market value of the assets of the Partnership under this definition, fair market value shall be based on the entire value of the assets of the Partnership and its investments, without any discount for any minority interest. The Fair Market Value of a Unit shall be determined by agreement of the holder of such Unit and the General Partner; provided, however, that if such parties do not reach agreement on the Fair Market Value thereof within 30 days after either party first proposes to the other party in writing an amount that represents its calculation of the Fair Market Value of such Unit, the Fair Market Value thereof shall be determined by an independent appraiser selected by such parties, and engaged by the Partnership. If no agreement can be reached on the selection of an appraiser, (i) each of the General Partner and such Partner shall select an appraiser and those two appraisers will select a third appraiser, each of whom will complete an appraisal and (ii) Fair Market Value will be calculated by averaging the two appraisals that are closest in value. The holder of the pertinent Unit must pay the expenses of its own appraiser and the Partnership shall pay the remainder of the expenses.

“Final Closing” has the meaning provided in Section 4.1(b).

“Financial Statements” mean the Partnership’s balance sheet setting forth the assets and liabilities of the Partnership as of the beginning and the end of each Fiscal Year, a statement of changes in the Partners’ equity as of such dates and a statement of operations.

“Fiscal Period” means a Fiscal Quarter or a Fiscal Year, as the case may be.

“Fiscal Quarter” means each of the three-month periods ended March 31, June 30, September 30 and December 31.

“Fiscal Year” means the calendar year.

“GAAP” means United States generally accepted accounting principles.

“General and Administrative Expenses” has the meaning provided in Section 3.5.

“General Partner” has the meaning set forth in the Preamble, and also includes any other Person admitted to the Partnership as a general partner in accordance with the provisions hereof.

“General Partner Indemnitees” has the meaning set forth in Section 9.3(a).

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, subject to the following exceptions and adjustments: (i) the initial Gross Asset Value of any asset contributed by a Partner to the Partnership will be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner; (ii) the Gross Asset Value of all Partnership assets will be adjusted to equal their respective gross fair market values, as determined by the General Partner, immediately preceding the occurrence of any of the following events if the General Partner determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership: (A) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for an interest in the Partnership; (C) the liquidation of the Partnership within the meaning of Regulations §1.704-1(b)(2)(ii)(g) (which for


8 | LPA

this purpose will include the termination of the Partnership for federal income tax purposes pursuant to Code §708(b)(1)(B)); and (D) any other event for which such an adjustment is permitted under Regulations §1.704-1(b)(2)(ii); (iii) the Gross Asset Value of any Partnership asset distributed to any Partner will be the gross fair market value of such asset on the date of distribution as agreed to by the General Partner and the distributee Partner; (iv) the Gross Asset Values of Partnership assets will be increased (or decreased) to reflect any adjustment to the adjusted basis of such assets pursuant to Code §734(b) or Code §743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations §1.704-1(b)(2)(iv)(m) and Section 7.3(d); provided, however, that Gross Asset Values will not beadjusted pursuant to this subsection (iv) to the extent the General Partner determines that an adjustment pursuant to subsection (ii) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (iv); and (v) if the Gross Asset Value of an asset has been determined or adjusted pursuant to subsection (i), (ii), or (iv) above, such Gross Asset Value will thereafter be adjusted by the Book Depreciation (calculated in accordance with Regulations §1.704-1(b)(2)(iv)(g)) taken into account with respect to such asset for purposes of computing Net Profits and Net Losses.

“Holding Company” means the subsidiary entities used to hold the Partnership’s Portfolio Company acquisitions.

“In-House Services” include but are not limited to finance, tax, accounting, legal, compliance, information technology, human resources, investor relations, risk management, operational, administrative and management services provided to the Partnership or the Portfolio Companies by the General Partner, its Affiliates (including Holding Companies), and Ascendant Capital and its officers and employees.

“Indemnitee” has the meaning provided in Section 9.3(a).

“Independent Person” means a Person whom the General Partner has determined has no material relationship with the Manager or the Partnership (either directly or as a partner, shareholder or officer of an Affiliate); and a Person will not be “Independent” if such Person (i) is, or has been within the last three years, an employee of either the General Partner, the Partnership or any of their respective Affiliates, or an immediate family member is, or has been within the last three years, an executive officer, of the General Partner, the Partnership or any of their respective Affiliates; (ii) has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in the aggregate in direct compensation from the General Partner, the Partnership or any of their respective Affiliates; (iii) is a current partner or employee of a firm that is the internal or external auditor of the General Partner or the Partnership, the Person has an immediate family member who is a current partner of such a firm, the Person has an immediate family member who is a current employee of such a firm and personally works on the audit of the General Partner or the Partnership, or the Person or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the audit of the General Partner or the Partnership within that time; (iv) or an immediate family member of such Person is, or has been within the last three years, employed as an executive officer of another company where any of the present executive officers of the Partnership or the General Partner at the same time serves or served on that company’s compensation committee; or (v) is a current employee, or an immediate family member of such


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Person, is a current executive officer, of a company that has made payments to, or received payments from, the Partnership or the General Partner for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

“Legal Counsel” has the meaning provided in Section 13.13.

“Limited Partner” means any Person, including Additional Limited Partners, admitted to the Partnership as a limited partner in accordance with the terms hereof.

“Limited Partner Preferred Return” means (i) with respect to Class A-1 Units and Class B-1 Units, an amount equal to 10% per annum; (ii) with respect to Class A-2 Units and Class B-2 Units, an amount equal to 9% per annum; (iii) with respect to Class A-3 Units and Class B-3 Units, an amount equal to 8% per annum; and (iv) with respect to Class A-4 Units and Class B-4 Units, an amount equal to 7% per annum, in each case on a Limited Partner’s Average Capital Contribution.

“Limited Voting Partner” has the meaning provided in Section 4.6.

“List of Partners” means the list, maintained by the General Partner, setting forth the names, addresses, e-mail addresses, telecopy numbers and Allocation Percentages, Capital Contributions and Net Capital Contributions of the Partners, as well as the percentage of Class A-1 Units and Class B-1 Units held by such Partners.

“Majority of Limited Partners” means Limited Partners holding Units representing at least fifty percent (50%) of the aggregate Allocation Percentages of all Limited Partners who are eligible to vote or grant their consent or approval with respect to the applicable matter.

“Manager” means GPB Capital Holdings, LLC, a Delaware limited liability company.

“Managerial Assistance Fee” means a fee that is payable by the Partnership to the Manager, pursuant to the Managerial Services Agreement at a rate of 0.5% per Fiscal Quarter (2.0% annualized) of such Limited Partners’ Capital Contribution.

“Managerial Services Agreement” means the managerial services agreement between the Partnership and the Manager, as may be amended and/or restated from time to time.

“Monthly Remaining Capital Contribution” means, with respect to each class of Units of any Limited Partner, calculated at the end of each month, the excess of (i) such Limited Partner’s Capital Contribution in respect of such class of Units, over (ii) cumulative distributions to such Limited Partner with respect to such class of Units pursuant to Section 8.3 and Section 11.3(a)(3).

“Net Asset Value” means (i) the sum of cash and the Gross Asset Value of the Portfolio Companies, the value of which shall be calculated as follows: (a) for the first six months after the acquisition of a Portfolio Company, the acquisition cost of such Portfolio Company and (b) thereafter, the fair value of such Portfolio Company, determined in accordance with ASC 946, and other assets less (ii) Partnership Expenses, Organization and Offering Expenses, and any other liabilities.


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“Net Capital Contribution” means, with respect to each class of Units of any Limited Partner as of any particular date: (i) the aggregate amount of such Limited Partner’s Capital Contributions in respect of such class of Units, less (ii) the Selling Fees paid by the Partnership attributable to such contributions upon acceptance of such Limited Partner’s subscriptions, plus (iii) the aggregate amount of any waivers of or reductions in fees that would otherwise be attributable to such Limited Partner with respect to such class of Units.

“Net Distribution Ratio” means (i) with respect to Class A-1 Units, Class B-2 Units, Class B-3 Units and Class B-4 Units, 0.86; (ii) with respect to Class B-1 Units, 0.935; and (iii) with respect to Class A-2 Units, Class A-3 Units and Class A-4 Units, 0.79.

“Net Distribution Share” means, with respect to each class of Units of any Limited Partner, the quotient of (a) the aggregate Net Distribution Ratio of class of Units divided by (b) the aggregate Net Distribution Ratios of all outstanding Units.

“Net Profits” or “Net Losses” means, as the case may be, for any period, an amount equal to the Partnership’s Taxable Income or Taxable Loss for such period, with the following adjustments: (i) any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Profits and Net Losses pursuant to this definition will be added to such Taxable Income or will reduce such Taxable Loss; (ii) any expenditure of the Partnership described in Code §705(a)(2)(B) or treated as a Code §705(a)(2)(B) expenditure pursuant to Regulations §1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this definition, will be subtracted from such Taxable Income or Taxable Losses; (iii) if the Gross Asset Value of any Partnership asset is adjusted pursuant to subsection (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment will be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses; (iv) gain or loss resulting from the disposition of any Partnership asset with respect to which gain or loss is recognized for federal income tax purposes will be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such Taxable Income or Taxable Loss, there will be taken into account Book Depreciation for such Fiscal Year or other period; and (vi) notwithstanding any other provision of this definition, any item that is specially allocated pursuant to Sections 7.1(a), 7.1(c) or 7.3 will not be taken into account in computing Net Profit or Net Loss.

“Operations Expenses” has the meaning provided in Section 3.3(a). For the avoidance of doubt, Operations Expenses are generally paid and/or reimbursed by the Partnership in accordance with this Agreement, but may be paid or reimbursed by the relevant Portfolio Company.

“Operations Support Services” means operational support and consulting services and similar services to, or in connection with, the identification, acquisition, holding and improvement of Portfolio Companies, provided by companies and individuals, including affiliates and employees of the Manager and third-party consultants and advisors, retained by the Manager, the Partnership or such Portfolio Companies. Such services may be high level insight or extensive day-to-day roles, and may include support to the Manager or Portfolio Companies regarding, among other things, such company’s management and operations (including serving in management positions or participating in determining corporate strategy), such company’s sales or marketing strategy


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and retail strategy, data intelligence, finance (including generating metrics and reporting and business restructuring), human capital management (including recruiting personnel and determining executive and incentive compensation), information technology, corporate communications, customer service, sustainability, real estate matters and similar operational matters. The General Partner’s determination as to whether a service is an “Operations Support Service”, the categorization of any fees and expenses (e.g., as Operations Expenses) and the allocation of such fees and expenses shall be binding on the Partnership and the Limited Partners.

“Organization and Offering Expenses” means fees, costs, and expenses actually incurred by the Partnership, the General Partner, its Affiliates, or a third party, through the Final Closing, in connection with the formation and organization of the Partnership, any feeder vehicles that invest directly or indirectly in the Partnership (including any employee vehicles), Parallel Vehicles and/or Blocker Corporations, and the General Partner, as well as conducting the Private Placement, including (i) the preparation of this Agreement and the organizational agreements of such other entities, or any amendment or restatement of this Agreement or such other agreements (to the extent prepared in connection with the formation or organization of the Partnership or any transaction at or in connection with any Closing), (ii) the preparation of any offering documents, subscription materials and related documents in connection with any Private Placement, (iii) legal, accounting, filing, consulting and other professional fees and expenses, (iv) a reasonable allocation of time expended by the General Partner or Affiliates thereof, and their respective employees and representatives, and (v) all other costs and expenses (including travel and entertainment expenses relating to capital raising efforts) actually incurred by the Partnership, the General Partner or Affiliates thereof. “Organization and Offering Expenses” do not include Selling Fees.

“Original Agreement” has the meaning set forth in the Recitals.

“Other GPB Entities” means any other accounts, Holding Companies or entities sponsored or managed by the Manager.

“Partner” means either the General Partner, the Special Partner or any Limited Partner, and “Partners” means the General Partner, the Special Partner and all Limited Partners.

“Partnership” means the partnership formed pursuant to this Agreement and the partnership continuing the business of the Partnership in the event of winding up as provided herein.

“Partnership Audit Rules” means Chapter 63 of the Code, as amended by the Bipartisan Budget Act of 2015 (and any Regulations or other guidance that may be promulgated in the future relating thereto) and, in each case, any analogous provisions of state, local, and non-U.S. law.

“Partnership Expenses” has the meaning provided in Section 3.3.

“Partnership Information” has the meaning provided in Section 9.5(a).

“Partnership Legal Matter” has the meaning provided in Section 13.13.

“Partnership Representative” has the meaning provided in Section 6.7.

“Partnership Term” has the meaning provided in Section 1.5.


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“PCAOB” means the Public Company Accounting Oversight Board or its successor.

“Performance Allocation” means the amount distributed to the Special Partner pursuant to Sections 8.3(4) and 8.3(5).

“Person” means an individual or a corporation, limited liability company, partnership (whether general, limited or limited liability), trust, unincorporated organization, joint stock company, joint venture, association or other entity, or any government, or any agency or political subdivision thereof.

“Placement and Marketing Support Fee” means cash fees paid by purchasers of Class A-1 Units, as determined by the General Partner, to broker-dealers, certain employees, officers and directors of Ascendant Capital, and/or an Affiliate of the Partnership for assisting with the marketing and due diligence of the Private Placement, as determined by the General Partner, a substantial portion of which may be paid or reallowed on a non-accountable basis. The Placement and Marketing Support Fee will be payable with respect to such Capital Contributions upon acceptance by the Partnership of an investor’s subscription and will be subtracted from such Capital Contributions. The General Partner may, in its sole discretion, reduce, waive or calculate differently the Placement and Marketing Support Fee with respect to any Limited Partner, including Limited Partners that are members, Affiliates or employees of the General Partner, members of the immediate families of such persons and trusts or other entities for their benefit, as well as Limited Partners (such as other funds) that charge management or similar fees to their investors.

“Portfolio Company” means any entity in which the Partnership has invested, other than any special purpose vehicle formed by the General Partner, the Partnership or their Affiliates for purposes of facilitating an investment.

“Private Placement” means any offering of Units by the Partnership that is not registered under the Securities Act.

“Private Placement Memorandum” means the Confidential Private Placement Memorandum of the Partnership, as amended and supplemented from time to time.

“Profits Interest” means an interest that is awarded to the Special Partner or its designee in exchange for its services to the Partnership, and that is intended as a “profits interest” (as such term is defined in Revenue Procedure 93-27).

“Redemption Price Per Unit” has the meaning provided in Section 10.7.

“Register” means the list of Partners, their Units and other information as provided in Section 3.9.

“Registrar and Transfer Agent” means the registrar and transfer agent for the Partnership referred to in Section 3.9, which will be the General Partner if no other registrar and transfer agent is appointed thereunder.

“Regulations” means the final and temporary regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code. All references


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herein to Sections of the Regulations shall include any corresponding provision or provisions of successor provisions thereof.

“Regulatory Allocations” has the meaning provided in Section 7.3(g).

“Related Party” means the General Partner, the Special Partner, the Manager or any of their respective Affiliates (including any holding companies, Portfolio Companies, or structuring vehicles of the Manager or its Affiliates), officers, directors, agents or equity holders, or any immediate family member of the foregoing.

“Related Party Transaction” means any financial transaction, arrangement or other contractual relationship between the Partnership and a Related Party (except for Holding Companies, Portfolio Companies, or other subsidiaries of the Partnership, and except for the Managerial Services Agreement, the Dealer Manager Agreement (as defined in the Private Placement Memorandum) and any transactions relating to the joint venture co-investments by the Partnership and Other GPB Entities).

“Rule 506(d)” has the meaning provided in Section 4.6.

“Securities Act” means the Securities Act of 1933, as amended.

“Selling Fees” means any sourcing, commitment, financing, transaction, investment banking, brokers’, finders’, and other similar fees payable to a selling agent (including certain employees, officers and directors of Ascendant Capital) for any offering or sale of Units, including the Commissions, Wholesaling Fees and the Placement and Marketing Support Fees respecting Class A-1 Units and the Servicing Fee respecting Class B-1 Units.

“Servicing Fees” means cash fees paid by purchasers of Class B-1 Units, as determined by the General Partner, to broker-dealers, certain employees, officers and directors of Ascendant Capital, and/or an Affiliate of the Partnership for assisting with the marketing and due diligence of the Private Placement and payable as determined by the General Partner, a substantial portion of which may be paid or reallowed on a non-accountable basis. The Servicing Fee will be payable with respect to such Capital Contributions upon acceptance by the Partnership of an investor’s subscription and will be subtracted from such Capital Contributions, and thereafter on an annual basis as determined by the General Partner. The General Partner may, in its sole discretion, reduce, waive or calculate differently the Servicing Fee with respect to any Limited Partner, including Limited Partners that are members, Affiliates or employees of the General Partner, members of the immediate families of such persons and trusts or other entities for their benefit, as well as Limited Partners (such as other funds) that charge management or similar fees to their investors.

“Special Partner” has the meaning set forth in the Preamble, and also includes any other Person admitted to the Partnership as a Special Partner.

“Subscription Documents” means the subscription agreement and other documents utilized by the General Partner in accepting subscriptions for Units from investors, which documents shall be in such form as is determined by the General Partner.


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“Supermajority of Limited Partners” means Limited Partners holding Units representing at least sixty-six and two-thirds percent (66 2/3%) of the aggregate Allocation Percentages of all Limited Partners who are eligible to vote or grant their consent or approval with respect to the applicable matter.

“Target Capital Account” means an amount equal to the aggregate distributions a Partner would receive pursuant to Section 8.3 if each of the Partnership’s assets were disposed of for an amount equal to its Gross Asset Value, and all liabilities of the Partnership were satisfied to the extent required by their terms (limited, with respect to a nonrecourse liability (as such term is defined in Regulations §1.702-2(b)(3)) or partner nonrecourse debt (as such term is defined in Regulations §1.704-2(b)(4)), to the Gross Asset Value of the assets securing each such liability), and the proceeds of such disposition and all other cash of the Partnership remaining after satisfaction of all Partnership liabilities were distributed among the Partners pursuant to Section 8.3, reduced by such Partner’s share of partner nonrecourse debt minimum gain (as such term is defined in Regulations §1.704-2(i)(5)) and partnership minimum gain (as such term is defined in Regulations §1.704-2(d)) immediately prior to such sale.

“Tax Distribution” means any distributions made to the Special Partner under Section 8.2.

“Taxable Income” or “Taxable Loss” means, as the case may be, for any period, the taxable income or taxable loss of the Partnership for such period, determined in accordance with Code §703(a), including all items of income, gain, loss or deduction required to be stated separately pursuant to Code §703(a)(1).

“Transfer” means a sale, assignment, transfer, gift, encumbrance, hypothecation, mortgage, pledge, exchange or any other conveyance or disposition by law or otherwise, voluntarily or involuntarily.

“Unit” means, as to any Partner, the Partner’s interest in the Partnership designated as a Class A-1 Unit, Class A-2 Unit, Class A-3 Unit, Class A-4 Unit, Class B-1 Unit, Class B-2 Unit, Class B-3 Unit, and/or Class B-4 Unit.

“Wholesaling Fees” means a fee paid by Class A-1 Unit purchasers, as determined by the General Partner, a portion of which may be reallowed to selected dealers, including certain employees, officers and directors of Ascendant Capital, on a non-accountable basis. The Wholesaling Fees will be payable with respect to Capital Contributions upon acceptance by the Partnership of an investor’s subscription and will be subtracted from such Capital Contributions.

2.2 Other Definitions.

All terms used in this Agreement that are not defined in this Article 2 have the meanings contained elsewhere in this Agreement.


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ARTICLE 3. MANAGEMENT

3.1 Authority.

Except as otherwise provided in this Agreement, the management and operation of the Partnership is vested exclusively in the General Partner. The General Partner has the power on behalf of the Partnership to carry out any and all of the purposes of the Partnership and to perform all acts and enter into and perform all contracts and other undertakings that it may deem necessary or advisable or incidental thereto. Except as otherwise expressly provided herein, the General Partner shall have, and shall have full authority to exercise, on behalf of and in the name of the Partnership, all rights and powers of a general partner of a limited partnership under the DRULPA necessary or convenient to carry out the purposes of the Partnership. Without limiting the foregoing but subject to the terms of this Agreement, including Section 3.2, the General Partner is hereby authorized and empowered in the name of and on behalf of the Partnership to:

(a) acquire (i) the assets of or controlling interests, whether equity, debt or otherwise, in Portfolio Companies, (ii) provide managerial assistance to such companies, (iii) develop such companies for income and/or long term growth, and (iv) otherwise operate, manage or sell such interests as the General Partner deems appropriate in its sole discretion;

(b) acquire by purchase, lease, or otherwise any real or personal property which may be necessary, convenient, or incidental to the accomplishment of the purposes of the Partnership including the authority to acquire real and personal property from the General Partner or any Limited Partner or their respective Affiliates;

(c) operate, maintain, improve, construct, lease and sell any Partnership assets necessary, convenient, or incidental to the accomplishment of the purposes of the Partnership;

(d) execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of Partnership assets, or in connection with managing the affairs of the Partnership, including executing amendments to the Agreement and the Certificate in accordance with the terms of the Agreement, pursuant to any power of attorney granted by the Limited Partners to the General Partner;

(e) register or take title to Partnership assets in the Partnership’s name or as trustee, with or without disclosing the identity of his, her or its principal;

(f) pay, prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting Partnership assets and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Partnership’s assets;

(g) borrow and lend money, and, in accordance with this Agreement, allow a Partner to lend money to other Partners or transact other business with the Partnership or Partners;

(h) borrow or raise money by issuing, accepting, endorsing or executing notes, drafts, bills of exchange, warrants, bonds, debentures, instruments or evidences of indebtedness; securing


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the indebtedness by mortgage, pledge, transfer, or assignment in trust of all or any part of the Partnership’s assets; and selling, pledging, or disposing of the Partnership’s obligations;

(i) care for and distribute funds to the Partners by way of cash, income, return of capital, or otherwise, all in accordance with the provisions of this Agreement, and perform all matters in furtherance of the objectives of the Partnership or this Agreement;

(j) contract on behalf of the Partnership for the employment and services of employees and/or independent contractors, such as lawyers and accountants, and delegate to such Persons the duty to manage or supervise any of the assets or operations of the Partnership;

(k) engage in any kind of activity, including any other trade, business, or investment activity, and perform and carry out contracts of any kind (including contracts of insurance covering risks to the Partnership’s assets and General Partner liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Partnership, as may be lawfully carried on or performed by a partnership under the laws of each state in which the Partnership is then formed or qualified;

(l) make any and all elections for federal, state, and local income tax purposes including any election, if permitted by applicable law: (i) to adjust the basis of the Partnership’s assets under Code §§754, 734(b), and 743(b), or comparable provisions of state or local law, in connection with transfers of Partnership interests and Partnership distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Partners with respect to adjustments to the Partnership’s federal, state, or local tax returns; and (iii) to represent the Partnership and the Partners, before taxing authorities or courts of competent jurisdiction in tax matters affecting the Partnership, the General Partner, and the Limited Partners in their capacities as General Partner or Limited Partners and to execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the General Partner and Limited Partners with respect to such tax matters or otherwise affect the rights of the Partnership, General Partner, and Limited Partners;

(m) take, or refrain from taking, all actions, not expressly proscribed or limited by this Agreement, as may be necessary or appropriate to accomplish the purposes of the Partnership;

(n) institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Partnership or the Partners in connection with activities arising out of, connected with, or incidental to this Agreement, and to engage counsel or others in connection therewith;

(o) withhold any funds due to a Limited Partner who is a foreign Person as may be required by the Code and the Regulations;

(p) establish any reserve accounts for either operating expenses or capital expenditures, which reserves may be increased or decreased in the sole and absolute discretion of the General Partner;


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(q) enter into any contract, agreement, lease or other arrangement for the furnishing to or by the Partnership of goods, services or space with any party or entity related to or affiliated with the General Partner or with respect to any entity which the General Partner has any direct or indirect ownership or control if such arrangement is bona fide, at competitive price;

(r) waive or reduce, in whole or in part, any notice period, minimum amount requirement, or other limitation or restriction imposed on Capital Contributions or withdrawals of capital; waive, reduce, defer or, by agreement with any Limited Partner, otherwise vary any fee or special allocation to the General Partner, and/or any requirement imposed on that Limited Partner by this Agreement. The General Partner will have such right, power and authority regardless of whether such notice period, minimum amount, limitation, restriction, fee, or special allocation, or the waiver or reduction thereof, operates for the benefit of the Partnership, the General Partner or fewer than all the Limited Partners;

(s) admit Limited Partners to the Partnership and remove Limited Partners;

(t) amend this Agreement in accordance with the terms hereof;

(u) retain the Manager or other persons selected by the General Partner to provide certain managerial assistance services to the Partnership and to cause the Limited Partners to compensate the Manager for such services; provided, however, that the management, control and conduct of the activities of the Partnership shall remain the responsibility of the General Partner; and

(v) engage in any kind of activity, and to perform and carry out contracts of any kind, necessary to, or in connection with, or incidental to the accomplishment of, the purposes of the Partnership.

The General Partner may appoint such officers of the Partnership as it may deem appropriate and may remove any such officer at any time with or without cause. The General Partner may delegate to the Partnership’s officers such powers and duties as it may deem appropriate and subsequently revoke or modify those powers and duties, and except to the extent that the General Partner determines otherwise, each officer will have the powers and duties normally associated with an officer having a similar title with a Delaware corporation. The General Partner also may delegate authority to other Persons and revoke that delegation as it may deem appropriate include the power to delegate authority.

3.2 Limitations on Authority.

Notwithstanding any term or provision set forth in this Agreement to the contrary, the General Partner does not have the authority, right, power or privilege to:

(a) Do or undertake any act in contravention of this Agreement without the approval of a Majority of Limited Partners;

(b) Cause the Partnership to participate in a Related Party Transaction without the approval of the Advisory Committee, in the manner provided in Section 3.16;


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(c) Cause the Partnership to borrow in excess of the lesser of (i) 50% of the amount the General Partner expects the Partnership to raise in its Private Placement, and (ii) 50% of the Partnership’s Gross Asset Value (for such purpose, excluding the borrowings of any Portfolio Company) determined as of the date such indebtedness is incurred; or

(d) Cause the Partnership to purchase an asset from, or sell an asset to, any another accounts, Holding Companies or entities sponsored and managed by the Manager, except to the extent such transaction (i) is part of a consolidation or “roll up” of Portfolio Companies for the eventual purpose of creating liquidity and (ii) is approved by the Advisory Committee in the manner provided in Section 3.16(c).

3.3 Partnership Expenses.

The Partnership is responsible for and shall pay all Partnership Expenses. All Partnership Expenses shall be paid out of funds of the Partnership determined by the General Partner to be available for such purpose. As used herein, the term “Partnership Expenses” means all costs, expenses and charges incurred with respect to the ownership, operation and maintenance of the Partnership and its assets, as determined by the General Partner, and includes the following, but does not include the Organization and Offering Expenses:

(a) (i) all fees and expenses incurred (including but not limited to any such fees or expenses of or payable to Ascendant Capital) in connection with (a) the origination, evaluation (including industry analyses and evaluations), investigation, structuring, acquisition, or disposition of Partnership assets, including appraisals fees, taxes, brokerage fees (including but not limited to the Acquisition Fee (as defined in the Private Placement Memorandum) and finder’s fees), underwriting commissions and discounts, legal, accounting, investment banking, consulting, information services, professional fees and financing fees (including the repayment of those financings and the costs related to establishing and maintaining a credit facility for the Partnership) and investment-related travel; (b) the carrying or management of the Partnership’s assets; (c) communications with Partners; (d) any restructuring or amendments to the constituent documents of the Partnership and any subsidiary or other entity owned by the Partnership; (e) distributions to the Partners; (f) In-House Services; and (g) Operations Support Services, including but not limited to an annual fee or retainer, a discretionary bonus, a profits or equity interest in a Portfolio Company or Holding Company or other incentive-based compensation to the provider of Operations Support Services, any expenses incurred with respect to recruiting and hiring providers of Operations Support Services, and the compensation of certain employees of the Manager relating to the time such employees provide Operations Support Services (collectively, “Operations Expenses”); (ii) attorneys’ and accountants’ fees and expenses; (iii) taxes (including margin taxes) and other governmental charges levied against the Partnership (except to the extent that such taxes or other governmental charges have actually been reimbursed or deemed to have been paid by a Partner or former Partner pursuant to Section 8.5); and (iv) indemnifiable insurance, regulatory or litigation expenses (and damages) of the General Partner and other persons or entities indemnified under this Agreement;

(b) Managerial Assistance Fees;


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(c) all fees and expenses incurred in connection with any meetings of the Limited Partners;

(d) all fees and expenses incurred in connection with the registration, qualification or exemption of the Partnership under any applicable federal, state, or local law and all other fees and expenses imposed by any governmental authority with respect to the Partnership’s operations or assets;

(e) all fees and expenses relating to the preparation of financial statements of the Partnership, the local, state and federal income, franchise, margin and other tax returns of the Partnership, other regulatory reports and filings of the Partnership, and all other documents, opinions, appraisals and reports delivered to the Partners;

(f) all fees and expenses (including expenses of the Partnership Representative) incurred in connection with any litigation, mediation, arbitration or other legal or tax proceeding involving the Partnership (including the cost of any investigation and preparation) and the amount of any judgment or settlement paid in connection therewith;

(g) all fees and expenses incurred in connection with the collection of amounts due to the Partnership;

(h) all fees and expenses incurred in connection with the winding-up, dissolution and liquidation of the Partnership;

(i) all fees and expenses incurred in connection with transactions that are allocated to the Partnership but not consummated; and

(j) all insurance costs and expenses, and all costs and expenses incurred in connection with any obligations to provide indemnification or contribution to any Indemnitee pursuant to Section 9.3, pursuant to any approval of the Partners or as a matter of law.

3.4 Organization and Offering Expenses.

The Partnership will bear and/or reimburse the General Partner for all Organization and Offering Expenses, but only up to 1.25% of the gross proceeds received by (or expected to be received by) the Partnership in all Private Placements. Any Organization and Offering Expenses in excess of the foregoing amount will be borne by the General Partner or its Affiliates.

3.5 General and Administrative Expenses.

The General Partner or the Manager shall bear, and shall not be entitled to be reimbursed by the Partnership for, its or its Affiliates’ general and administrative costs and expenses and its day-to-day overhead expenses of managing the Partnership (collectively, the “General and Administrative Expenses”). General and Administrative Expenses shall mean the following, whether such expenses are incurred directly by the General Partner, the Manager or indirectly through any Affiliate:

(a) costs and expenses for the compensation of the General Partner’s, the Manager’s or their Affiliates’ officers and employees (including salaries, bonuses, payroll taxes and employee


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benefits), other than the portion of the total compensation of the General Partner’s, the Manager’s (or their Affiliates’) or Ascendant Capital’s officers and employees relating to the time such officers or employees provide services to the Partnership or its Portfolio Companies, which, to the extent not reimbursed by a Portfolio Company, will be a Partnership Expense;

(b) rental expense and other occupancy costs and expenses for the rental or lease of office space for the General Partner, the Manager or their Affiliates, other than space rented primarily for the Partnership’s business;

(c) travel and entertainment expenses unrelated to the Partnership or its business; and

(d) costs and expenses for, or relating to, the General Partner’s or the Manager’s office or offices including (i) acquiring or leasing furniture, fixtures and equipment, (ii) office materials and supplies, (iii) telephone and telecommunication services and other utilities, and (iv) repair and maintenance costs, other than the portion of any such items related to the Partnership’s business. General and Administrative Expenses shall not include out-of-pocket costs and expenses of the General Partner, the Manager or any Affiliate thereof related specifically to the Partnership, its business or its assets.

For the avoidance of doubt, Selling Fees and Managerial Assistance Fees are not General and Administrative Expenses.

3.6 Other Fees.

Other than as set forth in this Agreement, no Partner shall receive any salary, fee, or draw for services rendered to or on behalf of the Partnership in its Partner capacity, nor shall any Partner be reimbursed for any expenses incurred by such Partner in its Partner capacity on behalf of the Partnership, other than as set forth in this Agreement.

3.7 Certain Activities.

(a) The General Partner, itself or through an Affiliate, intends to devote a sufficient portion of its financial, personnel and other resources to administering the businesses of the Partnership to the extent that the General Partner deems necessary to perform its duties as set forth in this Agreement.

(b) Except as expressly provided in this Agreement, neither the General Partner, its Affiliates or their respective partners, managers, members, officers and directors shall be expressly or implicitly restricted or prohibited under this Agreement from engaging in other activities for profit, and the General Partner, its Affiliates and their respective partners, managers, members, officers and directors shall have the right to engage in and possess an interest in other business ventures of any and every type and description, independently or with others. The Limited Partners acknowledge that the General Partner, its Affiliates and their respective partners, managers, members, officers and directors may be engaged in other businesses in which the Partnership will not have an interest and which may be competitive with the activities of the Partnership. The General Partner, its Affiliates and their respective partners, managers, members, officers and directors may be a partner,


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shareholder, director, officer, employee, consultant, joint venturer, advisor or act in any other capacity, with or to other entities, including limited partnerships and limited liability companies or other entities, which may compete with the Partnership. The General Partner may propose from time-to-time that the Partnership enter into Related Party Transactions for the provision of certain services, which the Partnership may enter into in the manner provided in Section 3.16(c).

(c) Subject to the General Partner’s express obligations under this Agreement, the Limited Partners agree that the activities and facts described in this Section 3.7 shall not constitute a breach of the General Partner’s fiduciary duty to the Partnership or the Limited Partners. The Limited Partners hereby consent to such activities and the Limited Partners waive, relinquish and renounce any right to participate in, and any other claim whatsoever concerning, those activities. The Limited Partners further agree that neither the General Partner nor any other party referred to in this Section 3.7 will be required to account to the Partnership or any Limited Partner for any benefit or profit derived from any such activities or from such similar or competing activity or any related transactions by reason of any conflict of interest or the fiduciary relationship created by virtue of the position of the General Partner unless such activity is contrary to the express terms of this Agreement or the DRULPA. Each Limited Partner waives any right such Limited Partner may have against the General Partner for using for its own benefit information received as a consequence of the General Partner’s management of the affairs of the Partnership.Nothing in this Agreement shall constitute a waiver or limitation of any rights that a Limited Partner may have under the Advisers Act or under any other laws whose applicability is not permitted to be contractually waived.

3.8 Other Matters.

(a) The General Partner and its Affiliates shall not be liable to the Partnership or any Partner for losses sustained, liabilities incurred, or benefits not derived by any Partner in connection with or resulting from (i) any decisions made by, or actions taken or not taken by, the General Partner or its Affiliates, so long as the General Partner or its Affiliates, if applicable, acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interests of the Partnership and its conduct did not constitute gross negligence, fraud or willful or wanton misconduct; (ii) any identity theft or similar criminal action experienced by any Partner.

(b) The General Partner and its Affiliates may exercise any of the powers granted to it hereunder and perform any of the duties imposed upon it hereunder either directly or by or through agents and shall not be responsible for any misconduct or negligence on the part of any such agent appointed and supervised in good faith.

(c) The General Partner and its Affiliates may rely, and shall be protected in acting or refraining from acting, upon any consent, approval and any other action taken by the Limited Partners, and upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.


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(d) The General Partner and its Affiliates may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers, and any act taken or omitted to be taken in reliance upon the opinion or advice (whether written or oral) of such Persons as to matters which the General Partner reasonably believes to be within such Person’s professional or expert competence shall be presumed to have been done or omitted in good faith.

(e) The General Partner and its Affiliates shall not be liable to the Partnership or the Partners for the failure to perform any obligation to the extent the General Partner could not perform such obligation due to the fact that the Partnership does not have sufficient funds to enable the General Partner to perform such obligation.

3.9 Registrar and Transfer Agent.

The General Partner will either act as registrar and transfer agent for the Partnership or appoint a duly qualified and properly licensed trust or other company for such purpose and in such capacity the Registrar and Transfer Agent will maintain and keep a Register comprised of: (a) a list of the name and last known residence address or principal place of business of each Partner, and the type and amount of Units held by such Partner; (b) particulars of the registration of Units; and (c) particulars of the assignment of Units. Upon request, a Partner or his duly authorized representative shall be entitled to inspect, and at its expense receive a copy of, the Register.

3.10 Removal.

(a) The General Partner may be removed as the Partnership’s general partner upon the affirmative vote of at least 20% of the Limited Partners, without regard to ownership percentage, who are not Affiliates of the General Partner to remove the General Partner if any of the following events occur: (i) a final, non-appealable judicial determination that the General Partner has committed fraud, gross negligence or willful misconduct in connection with its material obligations to the Partnership under this Agreement, provided that such fraud, gross negligence or willful misconduct has a material adverse effect on the Company, or (ii) (A) an action or proceeding under the United States Bankruptcy Code is filed against the General Partner and (I) such action or proceeding is not dismissed within ninety (90) days after the date of its filing or (II) the General Partner files an answer acquiescing in or approving of such action or proceeding, (B) an action or proceeding under the United States Bankruptcy Code is filed by the General Partner or (C) a receiver or conservator is appointed to take control of the General Partner or all or a substantial portion of its property. Any affirmative vote of a Limited Partner to remove the General Partner may be given as follows: (i) by an affirmative vote given in writing or by means of electronic transmission by a Limited Partner; or (ii) by the affirmative vote of a Limited Partner to the removal of the General Partner at any meeting duly called and held to consider the taking of such action. Any such meeting convened pursuant to clause (ii) of the preceding sentence shall be called and held by the General Partner upon the receipt by the General Partner of a written request signed by not less than 10% of the Limited Partners. Upon receipt of such written request, the General Partner shall (i) provide notice to all Limited Partners that such meeting has been requested and (ii) within 21 days of receipt of


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such notice, call and hold a special meeting of the Limited Partners. If the General Partner does not call and hold such meeting as set forth in this Section 3.10, the requesting Limited Partners may call and hold such meeting by giving notice to all of the Limited Partners in writing and signed by each requesting Limited Partner.

(b) Upon any such removal the former General Partner shall be given prompt written notice of such removal.

(c) A Majority of Limited Partners shall select, in writing, any Person to be a successor General Partner of the Partnership, and such Person shall be granted a Profits Interest as of such date.

(d) Any removal shall not affect the General Partner’s or any Affiliates’ rights as a Limited Partner.

(e) Upon removal of the General Partner, the Special Partner’s Profits Interest will automatically and without further action by any Person, be deemed to have been distributed to the Special Partner, and, in turn, deemed to have been contributed to the Partnership in exchange for Units as a Limited Partner in a new Class of Units that does not carry any voting rights; and the Special Partner’s Profits Interest shall be deemed to have been contributed to the Special Partner except to the extent the General Partner is removed pursuant to Section 3.10(a)(i), in which case the Special Partner’s Profits Interest will be automatically forfeited to the Partnership. Such forfeiture will require an adjustment to the Gross Asset Value of the Partnership’s assets, as described in (ii) to the definition of Gross Asset Value.

(f) Effective upon removal of the General Partner, the Partnership shall change its name to a name not including the word “GPB.”

3.11 Reliance on Authority of General Partner.

No Person dealing with the General Partner or the Partnership shall be required to determine the authority of the General Partner to make any undertaking on behalf of the Partnership or to determine any fact or circumstance bearing upon the existence of such authority. No purchaser of any property or interest owned by the Partnership shall be required to determine the sole and exclusive authority of the General Partner to execute and deliver, on behalf of the Partnership, any and all documents and instruments in connection therewith or to see to the application or distribution of revenues or proceeds paid or credited in connection therewith:

3.12 Parallel Vehicles.

The General Partner may establish one or more parallel entities (each, a “Parallel Vehicle”). In furtherance of the foregoing, the General Partner may, but is not obligated to, admit a Limited Partner as a participant in a Parallel Vehicle, and in connection therewith and in consideration for the redemption of all or a portion of its Units, such Limited Partner shall receive an equivalent interest in such Parallel Vehicle. The form of organizational documents for each Parallel Vehicle shall be substantially the same in all material respects as those of the Partnership, subject to any legal, tax, accounting or other similar regulatory considerations.


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Parallel Vehicles may acquire a partial ownership interest in each of the Portfolio Companies on substantially the same terms and conditions as the Partnership in all material respects. Subject to any legal, tax, accounting or other considerations, the Partnership and each Parallel Vehicle will bear any Partnership Expenses and fees and any similar expenses of such Parallel Vehicle in proportion to their relative Capital Contributions; provided that Partnership Expenses and fees and any similar expenses of each Parallel Vehicle that are specifically attributable to the Partnership or a particular Parallel Vehicle may be borne by the Partnership or such Parallel Vehicle, as applicable, as determined by the General Partner in its sole discretion. The voting rights of Limited Partners generally will be aggregated with those of the investors in such Parallel Vehicles, as appropriate, for the purposes of determining the requisite majority or other specified percentage in interest thresholds for decisions relating to the Partnership.

3.13 Blocker Corporations.

(a) The General Partner may, in its good faith discretion, cause Limited Partners holding certain classes of Units to participate in certain investments through entities that are taxable as corporations (each, a “Blocker Corporation”). Such Limited Partners will be responsible for all incremental costs, expenses and reductions in proceeds attributable to such Blocker Corporation, including, without limitation, costs relating to the structuring, formation, operation and liquidation of, and all taxes incurred in connection with, related to or imposed upon, such Blocker Corporation. Any such incremental tax and other costs of investing in a Blocker Corporation shall be treated as paid to those Limited Partners that participate in such Blocker Corporation pursuant to Section 8.5, pro rata in respect of their Capital Contributions. Such Limited Partners shall be required to indemnify the Partnership for such incremental taxes and other costs to the extent that such amounts exceed amounts that are or will be distributed to such Limited Partners at the time such incremental taxes or other costs become due.

(b) In the event the Partnership uses a Blocker Corporation in connection with any investment, the General Partner may, in its sole discretion, form an entity as a subsidiary of the Partnership and such Blocker Corporation that is taxable as a partnership for federal income tax purposes (a “Holding Partnership”) and the Holding Partnership shall make the investment directly. The terms of the partnership agreement of the Holding Partnership shall have substantially the same governance and other terms set forth in this Agreement, including provisions which are intended to provide the Special Partner with substantially the same economic results had the investment been made without use of the Blocker Corporation. If the General Partner utilizes a Holding Partnership in connection with an investment as contemplated in this Section 3.13(b), for purposes of determining the distributions by the Partnership and such Holding Partnership, the investment results of the Holding Partnership will be aggregated with the investment results of the Partnership; provided, that (i) the Partnership shall be entitled to distributions from such Holding Partnership in respect of the Limited Partners participating in the investment through the Blocker Corporation, which distributions (x) will be determined pursuant to Section 8.3 as if such Holding Partnership were the Partnership and the Partnership were the Special Partner and (y) will be allocated by the Partnership solely to the Special Partner, and (ii) any costs and expenses (including taxes) of the Blocker Corporation shall be borne by such Blocker Corporation and the Limited Partners participating therein and shall not be taken


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account of in determining the Special Partner’s entitlement to any distributions from such Holding Partnership or the Partnership.

3.14 Managerial Assistance Fee.

Commencing upon each Limited Partner’s entry into the Partnership, the Partnership will pay the Manager the Managerial Assistance Fee. The Managerial Assistance Fee will be due and payable by the Partnership on the first business day of each calendar quarter. Managerial Assistance Fees owing for any period that is less than a full calendar year quarter will be pro-rated appropriately and will be payable on the first business day of such period. The Managerial Assistance Fee paid pursuant to this Section 3.14 is intended to constitute a guaranteed payment within the meaning of Code §707(c).

3.15 Acquisition Committee.

The Manager has established and appointed the members of the Acquisition Committee. The Manager has the right, in its sole discretion, to appoint additional members of the Acquisition Committee and replace members of the Acquisition Committee. The Acquisition Committee will be available to consult with the Manager, make determinations, decisions and recommendations. The Manager will be permitted to submit to the Acquisition Committee for its consideration issues upon which it desires the Acquisition Committee’s advice, including those involving conflicts of interest. The Partnership will not acquire or dispose of any Portfolio Company without approval of the Acquisition Committee.

3.16 Advisory Committee.

(a) Composition. The General Partner will appoint the advisory committee of the Partnership (the “Advisory Committee”), composed of at least three members, or such greater number as may be determined by the General Partner. No Affiliate or employee of the General Partner, the Special Partner, the Manager or Ascendant Capital shall serve as a member of the Advisory Committee (except to the extent a member may be employed by or otherwise affiliated with the Selling Group (as defined in the Private Placement Memorandum) other than Ascendant Capital). Any member of the Advisory Committee may be removed from the Advisory Committee by either (i) the vote of a Majority of Limited Partners or (ii) the affirmative written vote of all of the other Advisory Committee members. Any member of the Advisory Committee may resign upon delivery of written notice from such member to the General Partner. The General Partner shall not have the right to remove members of the Advisory Committee, but shall have the right (but not the obligation) to fill any vacancy on the Advisory Committee at any time, so long as there are at least three members of the Advisory Committee.

(b) Meetings and Compensation. The General Partner and members of the Advisory Committee will agree to compensation paid to its members for serving as such, including reimbursement for travel and other out-of-pocket expenses reasonably incurred by such members. The Advisory Committee will meet on an as-needed basis. Any such compensation shall be disclosed to the Limited Partners in the Private Placement Memorandum on an annual basis.


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(c) Related Party Transactions. The Partnership may not enter into a Related Party Transaction without the approval of all of the members of the Advisory Committee. With respect to Related Party Transactions that are acquisitions, (i) the acquisition must be documented in writing by the General Partner and Advisory Committee as being on terms no less favorable to the Partnership as could be obtained in a transaction negotiated at arms-length with an Independent Person, (ii) the General Partner must provide the Advisory Committee with an independent valuation of the proposed acquisition, and (iii) the Advisory Committee must determine that the acquisition is in the best interests of the Partnership.

ARTICLE 4. THE LIMITED PARTNERS

4.1 Admission.

(a) Each Limited Partner is hereby admitted to the Partnership as of the date the General Partner accepts their respective Subscription Documents.

(b) The General Partner may, in its discretion, cause the Partnership to hold one or more subsequent closings (each, a “Closing” and, the last such closing, the “Final Closing”), pursuant to which additional Limited Partners (“Additional Limited Partners”) may be admitted to the Partnership; provided, that the Final Closing shall occur on or before December 31, 2020, unless the General Partner in its discretion extends the Final Closing by a period of up to two additional one-year periods. At each Closing, each Additional Limited Partner shall be admitted to the Partnership as of the date of such Closing upon execution and delivery by such Additional Limited Partner of this Agreement and the other Subscription Documents, and acceptance by the General Partner thereof.

(c) Certain Affiliates of the General Partner will be able to invest in the Partnership as a Limited Partner. Any Limited Partner that is affiliated with the General Partner will be disregarded for the purposes of any vote on the removal of the General Partner pursuant to Section 3.10(a).

4.2 Rights and Duties.

Except as otherwise required by the DRULPA, no Limited Partner shall be personally liable for any of the debts or obligations of the Partnership, the liability of each Limited Partner to the Partnership will be limited to the total Capital Contributions that the Limited Partner is required to make to the Partnership and the obligations, if any, to return distributions to the Partnership to the extent required under the DRULPA or this Agreement, and such liability will be enforceable only by the Partnership and the Partners thereof and not by any creditors of the Partnership. The Limited Partners will have such approval and consent rights as are specifically provided for in this Agreement or under the DRULPA, but will not participate in the management or control of the Partnership’s operations, business or affairs, transact any business for the Partnership or have the power to act for or bind the Partnership, such powers being vested solely and exclusively in the General Partner. Limited Partners may exercise any such approval or consent rights at a meeting of the Partners or by written consent.


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4.3 Meetings.

(a) The General Partner may call a meeting of the Limited Partners from time-to-time by delivering to the Limited Partners notice of the time and purpose of the meeting at least ten days before the day of the meeting. Each meeting of Limited Partners shall be conducted by the General Partner. Meetings may be held by telephone conference or other electronic means and participation by a Limited Partner in a meeting by telephone conference or other electronic means shall constitute presence of that Partner. Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited Partner or his attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy will be revocable at the pleasure of the Limited Partner executing it.

(b) Whenever action is required by this Agreement to be taken by, or with the approval of, any Limited Partners, such action will be deemed to be valid if taken upon the written vote or written consent of those Limited Partners whose Allocation Percentages represent the specified Allocation Percentages required by this Agreement, the DRULPA or the 1934 Act and rules thereunder to take or approve such action. Whenever action is required by this Agreement to be taken by a specified percentage in interest of a specified class or group of Limited Partners, such action will be deemed to be valid if taken upon the vote or written consent of those Limited Partners of such class or group whose Allocation Percentages represent the specified percentage of the aggregate Allocation Percentages of all Limited Partners of such class or group. Except as expressly provided herein (or as may be required by the 1934 Act and rules thereunder), no class of, or enumerated category of, Limited Partners shall be entitled to vote or consent separately as a class with respect to any matter.

4.4 Book-Entry Evidence of Ownership.

The Units will be issued only in fully-registered book-entry form. Ownership of Units will be shown in, and transfer of Units will be affected only through, the Register. Certificates evidencing ownership of Units will not be issued. Units shall be transferable in the manner prescribed by law and in this Agreement, subject to restrictions set forth in this Agreement. Assuming all restrictions on transfers have been met, transfers of Units shall be made in the Register.

4.5 Joint Holders of Units.

Where Units are subscribed for by or assigned to two or more Persons: (a) the name of each Person will be shown on the Register for the Units; (b) the Units will be presumed by the Partnership to be held jointly; (c) amounts distributed by the Partnership for the Units will be in both names but may be sent to the Person whose name appears first on the Register for the Units or to such one of them as the joint holders direct in writing, and any one of such Persons may give effectual receipts for any distributions for the Units with the other of such Persons having no further recourse against the Partnership; and (d) any one of such Persons may vote for the Units as if that Person were solely entitled to the Units, but if more than one of such Persons is present or is represented at a


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meeting, the Person whose name appears first on the Register for the Units will alone be entitled to vote in respect of the Units.

4.6 Limited Voting Partners.

In the event the General Partner is unable to ascertain, in its sole discretion, that a Limited Partner (or any other beneficial owner, for purposes of Rule 506(d) under the 1933 Act (“Rule 506(d)”), of the Units held by such Limited Partner) is not a Bad Actor, the General Partner may designate such Limited Partner as a “Limited Voting Partner.” A “Bad Actor” is any person who is or has been subject to, is experiencing, or has experienced (in each case, within the period of time prescribed by the applicable disqualifying or disclosable event under Rule 506(d), assuming the Partnership were engaged in a sale of its Units as of the date of any determination of such person’s status by the General Partner) any of the events described in clauses (i)-(viii) under Rule 506(d)(1). Whenever the Partnership solicits or requires the vote or approval of Limited Partners on any matter, a Limited Voting Partner’s voting percentage for such vote or approval shall be deemed to be the lesser of (i) its voting percentage determined based on its Allocation Percentage and (ii) 19.99% or, where any such vote or approval is based on Partnership voting percentages excluding Affiliates, such lower percentage required to ensure that the applicable Limited Voting Partner’s voting percentage (after adjusting for such exclusion of Affiliates) does not exceed 19.99%. The General Partner will adjust the voting percentages of other Partners pro rata to reflect the above adjustment with respect to the vote or approval of Limited Partners on any such matter, so that the sum of all Partnership voting percentages of all Partners with respect to such matters equals 100%. Nothing in this Error! Reference source not found. shall be deemed to grant to the Limited Partners any rights to approve of or consent to any matters that they do not otherwise have a right to approve of or consent to hereunder.

ARTICLE 5. CAPITALIZATION

5.1 Units.

(a) The Partnership is authorized to issue an unlimited amount of Units and classes of Units, other than Class A-1 Units and Class B-1 Units, without notice to any Limited Partner, as the General Partner may from time-to-time create and issue, with such terms, rights, designations and obligations as the General Partner may specify upon issuance of such classes of Units. Each outstanding Unit of a class shall have attached to it the same rights and obligations as, and will rank equally and pari passu with, each other Unit of such class for distributions, allocations and voting except with respect to (i) any amounts required to make up differences, if any, in Selling Fees paid for any offering or sale of Units, (ii) the Managerial Assistance Fee, as set forth in Section 3.14 or (iii) any waivers, reductions or variations granted under Section 3.1(r) hereof. The General Partner is hereby authorized and directed to take all actions which it deems necessary or appropriate in connection with each issuance of an additional class of Units and to amend this Agreement in any manner which it deems necessary or appropriate to specify the relative rights, powers and duties of the holders of such Units and to provide for each such issuance. The issuance of any such additional class of Units and any amendment relating thereto shall not require the consent or approval of any Limited Partner.


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(b) The General Partner shall have the right to restructure the interests in the Partnership to address legal, tax or other concerns; provided, that such restructuring shall not have a material adverse effect on any Limited Partner without the prior written consent of such Limited Partner.

5.2 Capital Contributions.

(a) The Capital Contributions and Net Capital Contributions of the Partners will be the amounts specified in the List of Partners, as amended from time-to-time.

(b) At each Closing, each Additional Limited Partner will make the Capital Contribution specified in the Subscription Documents executed by it and accepted by the General Partner, which amount will be reflected in the List of Partners effective as of the first day of the calendar month following the month in which such payment was made.

5.3 Additional Capital Contributions.

The Partners will not be obligated to make any additional Capital Contributions to the Partnership.

5.4 Return of Capital.

No Partner has the right to demand or receive the return of such Partner’s Capital Contributions, even in the event of withdrawal of the General Partner, whether or not such withdrawal is permitted hereunder or in breach hereof. Under circumstances requiring a return of any Capital Contributions, no Partner shall have the right to receive property other than cash except as may be specifically provided herein.

5.5 No Interest on Capital Contributions.

No Partner may receive any interest on such Partner’s Capital Contributions or such Partner’s Capital Account, notwithstanding any disproportion therein as between the Partners.

5.6 Debt Facility.

Subject to Section 3.2(c), the General Partner may arrange for one or more debt facilities, including seller financing, to acquire any assets, to make capital expenditures, to pay operating expenses, and for any other permitted purposes, in addition to, lieu of, or in advance of, using Capital Contributions.

ARTICLE 6. BOOKS AND RECORDS

6.1 Bank Accounts.

The General Partner will, at the expense of the Partnership, deposit all funds collected by it relating to the Partnership, including funds collected from Capital Contributions or proceeds generated from the Partnership’s business into an account or accounts in the name of the Partnership, as


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determined by the General Partner. Withdrawals from said accounts shall be made by signatures only of such Persons as designated by the General Partner.

6.2 Records.

The General Partner will maintain for the Partnership books and records in the form determined by the General Partner. Subject to Section 9.5, any Partner may, at its expense and upon providing the General Partner with no less than ten business days’ prior written request, have access to such books and records (excluding the List of Partners, but including the Register) during normal business hours or as designated by the General Partner, all of which the General Partner shall keep at the Partnership’s principal offices; provided, however, that the Partner exercising such right may not unreasonably interfere with or disrupt Partnership business.

6.3 Books and Tax Returns.

The General Partner will prepare and file all federal, state and local income and other tax returns required to be filed by the Partnership and will keep or cause to be kept complete and appropriate records and books of account in which will be entered all such transactions and other matters relative to the Partnership’s operations, business and affairs as are usually entered into records and books of account maintained by Persons engaged in businesses of like character or which are required by the DRULPA. Except as otherwise expressly provided herein, such books and records will be maintained in accordance with GAAP.

6.4 Audits.

The Financial Statements will be prepared on a GAAP basis and audited by a PCAOB-registered accounting firm as of the end of each Fiscal Year

6.5 Reports.

(a) Within 120 days after the end of each Fiscal Year, the General Partner will cause to be prepared and furnished to the Limited Partners a financial report for such Fiscal Year that includes the audited Financial Statements for such Fiscal Year and any other information that the General Partner deems necessary or appropriate.

(b) Within 120 days after the end of each Fiscal Year, the General Partner will cause to be prepared and furnished to the Limited Partners all necessary tax reporting information, which information shall include all necessary information in order for all Limited Partners to satisfy reporting obligations under the Code with respect to any investments by the Partnership in any entities organized or formed in jurisdictions outside the United States.

(c) Within 45 days after the end of each Fiscal Quarter, the General Partner shall use best efforts to cause to be prepared and furnished to the Limited Partners an unaudited summary investment report for such Fiscal Quarter; provided that in the event any Units are registered under the 1934 Act, the General Partner may deem reports filed by the Partnership thereunder to satisfy the foregoing.


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6.6 Tax Elections.

Except as otherwise provided herein, the General Partner will determine whether to make, refrain from making or revoke any available election pursuant to the Code (other than any election that would cause the Partnership to be classified for federal income tax purposes as an association taxable as a corporation). The General Partner shall not permit the Partnership to elect, and the Partnership shall not elect, to be treated as an association taxable as a corporation for U.S. federal, state or local income tax purposes under Regulations §301.7701-3(a) or under any corresponding provision of state or local law.

6.7 Partnership Audit Rules.

(a) The General Partner or its designee will be the “tax matters partner” of the Partnership for federal income tax purposes under Code §6231(a)(7) prior to the effectiveness to the Partnership of the Partnership Audit Rules, and the “partnership representative” as defined in Code §6223 (as amended by the Bipartisan Budget Act of 2015) following the effectiveness to the Partnership of the Partnership Audit Rules (the “Partnership Representative”), for all federal income tax purposes set forth in the Code with the power and authority to take all actions and do such things as required or as it shall deem appropriate under the Code, regulations or other guidance promulgated thereunder. The General Partner or its designee shall act in a similar capacity, and have similar powers and authority, under similar or analogous state, local or non-U.S. law. Each Limited Partner expressly consents to such designation and agrees that, upon the request of the General Partner, it will execute, acknowledge, deliver, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. The General Partner is specifically directed and authorized to take whatever steps the General Partner deems necessary or desirable to perfect such designation, including filing any forms or documents with the Internal Revenue Service and taking such other action as may from time to time be required under the Regulations. The Partnership Representative (if such Person is not the General Partner) shall act in all respects in its capacity as Partnership Representative at the direction of the General Partner. Any expenses incurred by the Partnership Representative in connection with its acting as Partnership Representative pursuant to this Section 6.7 shall be paid or reimbursed by the Partnership, and the Partnership shall reimburse and indemnify the Partnership Representative for any such expenses (including expenses incurred in connection with any audit or examination, or any legal proceeding in respect of any tax liability).

(b) Each Limited Partner shall, including any time after such Limited Partner withdraws from or otherwise ceases to be a Limited Partner, file its income tax returns in a manner consistent with the tax information provided to them by the Partnership (including on IRS Form K-1), shall not treat any Partnership item inconsistently on such Limited Partner’s individual income tax return with the treatment of the item on the Partnership’s tax return (including any amended tax return or statement), and shall not independently act with respect to administrative proceedings affecting the Partnership, unless previously authorized to do so in writing by the Partnership Representative, which authorization may be withheld in the complete discretion of the Partnership Representative. Each Limited Partner shall, including any time after such Limited Partner withdraws from or otherwise


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ceases to be a Limited Partner, take all actions requested by the General Partner, including timely provision of requested information and consents, in any manner permitted by the Partnership Audit Rules, in connection with the designation of the Partnership Representatives for the Partnership for all federal income tax purposes set forth in the Code (or similar designation under similar or analogous state, local or non-U.S. law) and in connection with implementing any elections or decisions made by the Partnership Representative (or Person acting in a similar capacity under similar or analogous state, local or non-U.S. law) related to any tax audit or examination of the Partnership (including to implement any modifications to any imputed underpayment or similar amount under Code Section 6225(c), any elections under Code Sections 6221 or 6226 and any administrative adjustment request under Code Section 6227, in each case, as amended by the Bipartisan Budget Act of 2015). Notwithstanding anything to the contrary in this Agreement, any information, representations, certificates, forms, or documentation provided pursuant to this Section 6.7 may be disclosed to any applicable taxing authority.

(c) Each Partner agrees to be bound by the provisions of this Section 6.7 at all times, including any time after such Partner ceases to be a Partner solely with respect to matters directly related to such Partner’s interest in the Partnership, and the provisions of this Section 6.7 shall survive the winding up, liquidation and dissolution of the Partnership.

ARTICLE 7. ALLOCATIONS

7.1 Allocation of Net Profits and Net Losses.

(a) Subject to Section 7.3, for each Fiscal Period, all Selling Fees shall be allocated among the Limited Partners in accordance with any Selling Fee actually charged with respect to the Units held by such Limited Partner.

(b) Subject to Sections 7.1(a) and 7.3, for each Fiscal Period, Net Profits and Net Losses (and items thereof) generally shall be allocated among the Partners, in proportion to, and until, each such Partner’s Capital Account balance (determined after taking into account all distributions and all allocations for the current Fiscal Year, except for the allocations pursuant to this Section 7.1) is increased or reduced to an amount equal to such Partner’s Target Capital Account. The General Partner may allocate in any particular Fiscal Period (i) items of income and gain to those Partners whose Capital Account balances are less than their Target Capital Account and (ii) items of loss and deduction to those Partners whose Capital Account balances are greater than their Target Capital Account, but in each case only up to an amount that would cause their Target Capital Account and Capital Account balances to be equivalent.

(c) If a Holding Partnership is utilized in connection with an investment as contemplated in Section 3.13(b), (i) items of income, gain, loss, and deduction recognized on or with respect to a Blocker Corporation will be allocated solely to the Limited Partners that participate in such investment through the Blocker Corporation, and (ii) items of income, gain, loss, and deduction allocated to the Partnership by the Holding Partnership will be allocated to the Limited Partners that do not participate in such investment through the Blocker


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Corporation and to the Special Partner so as to cause the allocations thereof to be consistent with the distributions set forth in Section 3.13(b) and 8.3. The Partnership shall be entitled to distributions from the Holding Partnership in respect of the Limited Partners participating in the investment through the Blocker Corporation, which distributions (x) will be determined pursuant to Section 8.3 as if such Holding Partnership were the Partnership and the Partnership were the General Partner and (y) will be allocated by the Partnership solely to the Special Partner.

7.2 Authority to Reallocate.

The Partners acknowledge and agree that (i) it is the overriding intent of the parties that the cumulative distributions made by the Partnership to the Partners over the life of the Partnership pursuant to Article 8 and Article 11, including distributions made in liquidation of the Partnership, shall be made among the Partners as described in Section 8.3, and (ii) notwithstanding Section 7.1, the General Partner shall have the authority to reallocate items of income, gain, loss, and deduction of the Partnership among the Partners so as to cause the allocations thereof to be consistent with the distributions set forth in Section 8.3.

7.3 Special Allocations.

(a) Minimum Gain Chargebacks. If during any taxable year there is a net decrease in partnership minimum gain (as such term is defined by Regulations §1.704-2(d)), then each Partner shall be specially allocated gross income for such taxable year (and, if necessary, for subsequent taxable years) in the manner provided in Regulations §1.704-2(f). Likewise, if there is a net decrease during any taxable year in the minimum gain attributable to Partner nonrecourse debt (as defined in Regulations §1.704-2(i)(3)) with respect to Partner nonrecourse debt, then any Partner with a share of the minimum gain attributable to such debt at the beginning of such taxable year shall be specially allocated items of gross income for such taxable year (and, if necessary, for subsequent taxable years) in the manner provided in Regulations §1.704-2(i)(4). This Section 7.3(a) is intended to comply with, and shall be interpreted to be consistent with, the minimum gain chargeback requirements of Regulations §§1.704-2(f) and 1.704-2(i).

(b) Qualified Income Offset. If any Limited Partner unexpectedly receives any adjustment, allocation or distribution described in Regulations §§1.704-1(b)(2)(ii)(d)(4), (5), or (6), that, after tentatively taking into account all allocations that would be made for the current period under this Agreement (other than allocations pursuant to this Section 7.3(b)), would cause or increase an Adjusted Capital Account Deficit, items of Partnership income and gain will be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations under Code §704(b), the Adjusted Capital Account Deficit as quickly as possible. This Section 7.3(b) is intended to comply with the qualified income offset requirement in Regulations §1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith.

(c) Preventative Allocation. If any Limited Partner would have an Adjusted Capital Account Deficit at the end of any Fiscal Year then such Limited Partner will be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible.


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(d) Optional Adjustment to Basis – Section 754. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code §734(b) or Code §743(b) is required pursuant to Regulations §1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss will be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Regulations Section.

(e) Overall Limitation on Allocation of Net Loss. Notwithstanding any other provision of this Agreement, no Net Loss will be allocated to any Limited Partner if such allocation would cause or increase an Adjusted Capital Account Deficit in such Limited Partner’s Capital Account. If the Capital Account of any Limited Partner would have an Adjusted Capital Account Deficit at any time when the Capital Account of any other Limited Partner would not have an Adjusted Capital Account Deficit, any further Net Loss will be allocated in accordance with the respective Capital Account balances of the Limited Partners whose Capital Accounts would have no Adjusted Capital Account Deficit. In the event that the allocation of further Net Loss would cause Adjusted Capital Account Deficits in the Capital Accounts of all Limited Partners, all such Net Loss will be allocated to the General Partner.

(f) Nonrecourse Deductions. Gross deductions that are Partner nonrecourse deductions (as defined in Regulations §1.704-2(i)(2)) for any taxable year shall be allocated to the Partner that bears the economic risk of loss with respect to the nonrecourse debt to which such Partner nonrecourse deductions are attributable in accordance with Regulations §1.704- 2(i). Nonrecourse deductions (as defined in Regulations §1.704-2(b)) will be allocated to the Partners in accordance with their respective Allocation Percentages. Solely for purposes of allocating excess nonrecourse liabilities of the Partnership among the Partners, the Partners agree that their respective interests in the profits of the Partnership are equal to their respective Allocation Percentages.

(g) Curative Allocations. The allocations set forth in Section 7.3(a) through Section 7.3(f) (“Regulatory Allocations”) are intended to comply with certain requirements of Regulations §§1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the Partners intend to divide Partnership distributions. Accordingly, the General Partner is hereby authorized to divide other allocations of Net Profit, Net Loss, and other items among the Partners so as to cause all of the Partnership’s allocations, including the Regulatory Allocations, to be consistent with the agreed division of Partnership distributions. In general, the Partners anticipate that this will be accomplished by specially allocating other Net Profit, Net Loss, and items of income, gain, loss and deduction among the Partners so that the net amount of the Regulatory Allocations and such special allocations to each such Person is zero. However, the General Partner may accomplish this result in any reasonable manner.

7.4 Tax Rules.

The following special allocations shall be made in the following order:


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(a) Proportional to Net Profits or Net Loss. Except as otherwise provided in this Section 7.4, for each taxable period, each item of Partnership income, gain, deduction and loss for tax purposes shall be allocated among the Partners in the same proportion as they share the corresponding item of Net Profits, Net Losses or other item of Partnership income, gain, loss or deduction for such period.

(b) Contribution of Property. In accordance with Code §704(c) and the Regulations thereunder, income, gain, loss, and deduction as to any property contributed to the capital of the Partnership shall, for tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Gross Asset Value.

(c) Gross Asset Value Adjustment. If the Gross Asset Value of any Partnership asset is adjusted as the result of an adjustment as described in subsection (ii) or (iv) of the definition of “Gross Asset Value,” subsequent allocations of income, gain, loss, and deduction as to such asset shall, for tax purposes, be made so as to eliminate as quickly as possible any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as pursuant to Code Section 704(c) and the Regulations thereunder.

(d) Elections Under Code §704(c). Notwithstanding anything herein to the contrary, the General Partner will allocate taxable items of income, gain, loss and deduction with respect to any property owned by the Partnership as of the date hereof, the adjusted basis of which differs from its Gross Asset Value, among the Partners on a property-by-property basis in accordance with one of the methods provided in Regulations §1.704-3, as selected by the General Partner. Any election or other decision relating to allocations under this Section 7.4 will be made by the General Partner in any manner that reasonably reflects the purposes and intention of this Agreement. Allocations under this Section 7.4 are for purposes of federal, state and local taxes only and shall not affect or in any way be taken into account in computing any Partner’s Capital Account balance or share of Net Profits, Net Losses or distributions pursuant to any provision of the Agreement.

7.5 Other Allocation Rules.

(a) Frequency. For purpose of determining the Net Profit, Net Loss, or any other item allocated to any period, Net Profit, Net Loss, and any such other item will be determined on a daily, monthly, quarterly, or other basis, as determined by the General Partner using any permissible method under Code §706 and the Regulations thereunder.

(b) Remaining Items. Any item of Partnership income, gain, loss or deduction and any other allocation not otherwise provided for in this Agreement must be divided among the Partners in the same proportions as the Partners share Net Profit or Net Loss, as the case may be, for such period.


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ARTICLE 8. DISTRIBUTIONS

8.1 Amounts.

Except as otherwise provided herein, distributions will be made by the Partnership as determined by the General Partner in its sole and absolute discretion. The General Partner shall be entitled to withhold from any distribution such amounts as the General Partner determines are necessary to create or fund any reserve for Partnership Expenses, liabilities or obligations of the Partnership. The General Partner may use broad discretion with respect to the current needs for operating capital, reserves for future operating capital, current investment and reinvestment opportunities, reserves for future investment and reinvestment opportunities, and distribution of the Partnership assets; provided, however, notwithstanding any provision herein to the contrary, the General Partner may not withhold any distribution of funds to the Partners which would violate the General Partner’s fiduciary duty under the DRULPA. It is the General Partner’s duty in determining the amount of distributions to the Partners, to take into account: (a) the Partnership’s anticipated needs in its business and sums necessary to operate its business until the income from further operations is available; (b) the amounts of its debts; (c) the necessity or advisability of paying its debts, or at least reducing them within the limits of the Partnership’s credit; and (d) the necessity or advisability of establishing any reserve amounts for either operating expenses or capital expenditures.

8.2 Special Partner Tax Distribution.

The Partnership may, prior to making any distributions under Section 8.3, make a cash advance to the Special Partner or its designee against distributions to be paid to the Special Partner under Section 8.3 to the extent that such distributions are not otherwise sufficient for the Special Partner or its designee or any of its members or beneficial owners (whether such interests are held directly or indirectly) to pay when due any income tax imposed on it or its members or beneficial owners with respect to allocations of income attributable to the Profits Interest, determined by assuming the applicability of the highest combined effective marginal federal, state and local income tax rates applicable to an individual resident in New York, New York, and taking into account the character of the income underlying the applicable tax obligation (i.e., capital gain, ordinary income or qualified dividend) and previous allocations of Net Losses attributable to the Special Partner’s Profits Interest under Section 7.1. Amounts distributed under this Section 8.2 will be treated as advances against distributions for purposes of Section 8.3 and will reduce subsequent distributions to the Special Partner under Section 8.3.

When the Partnership winds up pursuant to Section 11.1, if the amount distributed to the Special Partner under this Section 8.2 is greater than the amount that would have been distributed to the Special Partner under Sections 8.3(4), 8.3(4) and 11.3 (in respect of Sections 8.3(4) and 8.3(4)) in the absence of distributions under this Section 8.2, the Special Partner shall contribute to the Partnership, for distribution to the Limited Partners under Section 8.3, such excess reduced (i) by the Special Partner’s Net Tax Liability and (ii) without duplication, any deemed payment to the Special Partner pursuant to Section 8.5 and any other amounts the Special Partner pays or economically bears in respect of any “imputed underpayment” with the meaning of the Partnership Audit Rules. The Special Partner’s “Net Tax Liability” shall equal the income taxes imposed on


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the Special Partner and its direct and indirect beneficial owners in respect of allocations and distributions to the Special Partner as determined at the highest marginal federal, state and local income tax rates applicable to an individual resident in New York, New York for the relevant periods and taking into account the character of the income underlying the applicable tax obligation (i.e., long-term capital gain, ordinary income or qualified dividend income) less the tax benefit of losses allocated to the Special Partner to reverse prior allocations of taxable income to the extent that such tax benefits are actually realized in the form of a reduction in tax liability otherwise owed as determined by the Special Partner in its sole discretion. The amount so contributed will be for the sole benefit of the Limited Partners and not creditors of the Partnership, and may be paid directly to the Limited Partners by the Special Partner.

8.3 Priority.

After payment of any Tax Distributions and payment and reservation of all amounts deemed necessary by the General Partner in its sole discretion as contemplated by Section 8.1, amounts available for distribution by the Partnership will initially be apportioned among the Limited Partners in respect of each class of each Limited Partner’s Units in proportion to such class of Unit’s Net Distribution Share and will be further apportioned between each such Limited Partner and the Special Partner and, except as otherwise provided in this Agreement, distributed with respect to each such Partner in respect of each class of its Units (on a Partner by Partner basis) as follows:

(1) First, 100% to such Limited Partner until such Limited Partner has received cumulative distributions in respect of such class of Units pursuant to this Section 8.3(1) equal to such Limited Partner’s Net Capital Contribution in respect of such class of Units;

(2) Second, 100% to such Limited Partner until such Limited Partner has received cumulative distributions in respect of such class of Units pursuant to this Section 8.3(2) and Section 8.3(1) equal to such Limited Partner’s aggregate Capital Contributions in respect of such class of Units;

(3) Third, 100% to such Limited Partner in respect of such class of Units until such Limited Partner has received cumulative distributions pursuant to this Section 8.3(3) and Section 8.3(5) in an amount equal to the Limited Partner Preferred Return applicable in respect of such class of Units;

(4) Fourth, 100% to the Special Partner until the cumulative distributions in respect of such class of Units made to the Special Partner pursuant to this Section 8.3(4) equal 20% the sum of all amounts distributed to such Limited Partner in respect of such class of Units pursuant to Sections 8.3(2) and 8.3(3) and to the Special Partner under this Section 8.3(4); and

(5) Thereafter, 80% to such Limited Partner and 20% to the Special Partner.

The General Partner will make adjustments to amounts distributed pursuant to this Section 8.3 to take into account differences in fees paid with respect to different classes of Units or certain investments.


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8.4 General.

(a) Overriding Limitations on Distributions. Notwithstanding any other provision of this Agreement, distributions shall be made only to the extent of available cash of the Partnership and in compliance with the DRULPA and other applicable law.

(b) Distributions to Persons Shown on Partnership Records. Any distribution by the Partnership to the Person shown on the Partnership’s records as a Partner or to such Person’s legal representatives, or to the transferee of such Person’s right to receive such distributions as provided herein, shall constitute a release of the Partnership and the General Partner of all liability to any other Person that may be interested in such distribution by reason of any Transfer of such Person’s Units for any reason (including a Transfer of such interest by reason of the death, incompetence, bankruptcy or liquidation of such Person).

8.5 Tax Withholding.

(a) General. Each Partner shall, to the fullest extent permitted by applicable law, indemnify and hold harmless the General Partner, the Partnership, the Partners, the Partnership Representative, the Manager and any officer, agent or representative thereof who is or who is deemed to be the responsible withholding agent for U.S. federal, state or local or non-U.S. income tax purposes against (i) all claims, liabilities and expenses of whatever nature relating to such Person’s obligation to withhold and to pay over, or otherwise pay, any withholding or other taxes payable by the Partnership or as a result of such Partner’s participation in the Partnership and (ii) any liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any amounts described in clause (i) above. Each Partner shall furnish the General Partner with such information, documentation and certifications as the General Partner may request to comply with the regulations governing any withholding taxes and the obligations of withholding tax agents.

(b) Authority to Withhold; Treatment of Withheld Tax. Notwithstanding any other provision of this Agreement, each Partner hereby authorizes the General Partner in its reasonable discretion to, on behalf of the Partnership, withhold and to pay over, otherwise pay, or contribute to an entity in which the Partnership holds a direct or indirect interest an amount calculated by reference to, any withholding or other taxes (including, in each case, any associated interest, penalties or other additions) payable by the Partnership or any entity in which the Partnership holds a direct or indirect interest (under the Code or any provision of U.S. federal, state or local or non-U.S. tax law) with respect to such Partner or as a result of such Partner’s participation in the Partnership (including as a result of a distribution in kind to such Partner) as determined by the General Partner in its reasonable discretion, including amounts attributable to a Partner in respect of an “imputed underpayment” within the meaning of the Partnership Audit Rules. If and to the extent the Partnership is required to withhold or pay any such withholding or other taxes with respect to a Partner, such


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Partner will be deemed for all purposes of this Agreement to have received a payment from the Partnership as of the time each tax or other amount allocable or attributable to such Partner or resulting from such Partner’s status as a Partner is paid or withheld by or economically borne by or with respect to the Partnership or any direct or indirect investment of the Partnership, which payment shall be considered a loan from the Partnership to such Partner. Such loan shall be repayable on demand (and, for the avoidance of doubt, such repayment shall not be treated as a Capital Contribution) or, at the election of the General Partner in its reasonable discretion, discharged out of distributions to which such Partner would otherwise be entitled under Section 8.3 and shall, at the option of the General Partner, bear interest at the then “applicable federal short-term rate” under the Code and applicable Regulations, from the date such loan obligation arises until its date of repayment or discharge. Notwithstanding the foregoing, the General Partner may in its reasonable discretion elect to treat all or any portion of any such tax or other amount as an expense of the Partnership instead of as such a deemed loan. For purposes of this Section 8.5(b), the amount of taxes required to be withheld or paid with respect to a Partner will be determined based on the withholding tax rate applicable to such Partner under Section 8.5(c) (which must take into account any withholding exemptions or reductions applicable to such Partner, as established under Section 8.5(c)).

(c) Withholding Tax Rate. Any withholdings referred to in this Section 8.5 will be made at the maximum applicable statutory rate under the applicable tax law unless the General Partner has received an opinion of counsel, a valid and properly completed and executed withholding certificate, or other evidence, satisfactory to the General Partner to the effect that a lower rate is applicable or that no withholding is applicable. Amounts paid by the Partnership (or economically borne by the Partnership due to payment by or to any pass-through entity in which the Partnership invests, directly or indirectly) in respect of an “imputed underpayment” within the meaning of the Partnership Audit Rules shall be deemed attributable to, and among, the Partners in such manner as is determined appropriate by the General Partner in its reasonable discretion.

(d) Each Partner agrees to be bound by the provisions of this Section 8.5 at all times, including any time after such Partner ceases to be a Partner, and, to the fullest extent permitted by law, the provisions of this Section 8.5 shall survive the winding up, liquidation and dissolution of the Partnership.

ARTICLE 9. REPRESENTATIONS; WARRANTIES; RIGHTS; OBLIGATIONS

9.1 Representations & Warranties of the General Partner.

The General Partner represents and warrants to the other Partners as of the Effective Date and the date of the Final Closing as follows:

(a) it is duly formed, validly existing, and in good standing under the laws of the State of Delaware;


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(b) the transactions contemplated by this Agreement, the execution and delivery by it of this Agreement and the performance by it of its obligations hereunder have been duly authorized by all requisite action, and to the best of its knowledge, do not and will not conflict with, violate, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, (i) any agreement or contract; (ii) any provision of law, statute, rule or regulation; (iii) any charter, bylaw, partnership agreement, trust agreement or other organizational document; or (iv) any decree or order of any court or other agency of government; and

(c) this Agreement is a legal, valid and binding obligation of it and is enforceable against it in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

9.2 Representations & Warranties of the Limited Partners.

Each of the Limited Partners hereby represents and warrants to the Partnership and the other Partners as of the date that such Limited Partner is admitted to the Partnership and each date upon which it acquires any Unit that the information provided by such Limited Partner pursuant to the Subscription Documents completed and executed by such Limited Partner and the representations and warranties contained in such Subscription Documents are true, correct and complete at all times from and after the date upon which such Subscription Documents were completed and executed by such Limited Partner through and including the date upon which the Limited Partner acquired such Units.

9.3 Indemnification.

(a) To the fullest extent permitted by law, (i) the General Partner, (ii) the Manager, (iii) the Partnership Representative, (iv) their Affiliates, (v) members of the Acquisition Committee and the Advisory Committee, and (vi) the officers, directors, stockholders, members, managers, partners and employees of the General Partner and its Affiliates who perform or are alleged to perform any duties, responsibilities or functions for or on behalf of the Partnership, the General Partner, the Manager or their Affiliates on behalf of the Partnership, the General Partner or the Manager (individually, an “Indemnitee”), shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, whether joint or several, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of its status specified in clause (i) through (iii) above, if (A) such Indemnitee acted in good faith and in a manner it reasonably believed to be in, or not opposed to, the best interests of the Partnership, and, with respect to any criminal proceeding, had no reasonable cause to believe that its conduct was unlawful and (B) the conduct of such Indemnitee did not constitute fraud, gross negligence, willful misconduct or a material breach of this Agreement; provided, however, that the Partnership shall not


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be obligated to indemnify the General Partner, the Manager, their Affiliates or their respective officers, directors, stockholders, members, managers, partners and employees (collectively, the “General Partner Indemnitees”) against losses, claims, damages, liabilities, expenses, judgments, fines, settlements and other amounts arising from claims brought by one General Partner Indemnitee against another General Partner Indemnitee that do not involve and are not made in response to a claim brought against a General Partner Indemnitee by a third party. The termination of any action, suit or proceeding by judgment, order, settlement, or upon a plea of nolo contendere, or its equivalent, will not, of itself, create a presumption that the Indemnitee failed to meet the standards for indemnification set forth in the immediately preceding sentence.

(b) To the fullest extent permitted by law, expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 9.3 (other than any such claim, demand, action, suit or proceeding brought against an Indemnitee directly by a Limited Partner or by or in the right of the Partnership in accordance with applicable law in which the allegations against such Indemnitee consist exclusively of claims that such Indemnitee is subject to liability to such Limited Partner or the Partnership as a result of conduct that does not meet the standards specified in clause (A) or (B) of Section 9.3(a)) will, from time-to-time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding, upon receipt by the Partnership of an undertaking by or on behalf of the Indemnitee to repay such amount if it is determined that such Person is not entitled to be indemnified as authorized in this Section 9.3.

(c) The indemnification provided by this Section 9.3 will be in addition to any other rights to indemnification or contribution to which those indemnified may be entitled from the Partnership pursuant to any approval of the Partner or as a matter of law, both as to (i) an action in a capacity described in clauses (i) - (iv) of Section 9.3(a) and (ii) an action in another capacity, and will continue as to an Indemnitee who has ceased to serve in such capacity (but only as to actions taken by such Indemnitee prior to such Indemnitee ceasing to serve in such capacity) and will inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee. The Partnership may indemnify an Indemnitee against, or make contribution in respect of, losses, claims, damages, liabilities, whether joint or several, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts incurred by an Indemnitee on a basis other than that described in this Section 9.3 if such indemnification or contribution is approved by a Majority of Limited Partners.

(d) The Partnership may purchase and maintain insurance as the General Partner determines is available, customary and appropriate for a company engaged in activities similar to those of the Partnership, which insurance may provide coverage against any liability that may be asserted against or expense that may be incurred by the Partnership, the General Partner or any Indemnitee in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement. Any indemnification under this Section 9.3 will first be satisfied out of insurance proceeds to the extent such proceeds have been received by the Partnership. In the event any assets of the Partnership are used to satisfy any indemnification obligation hereunder and insurance proceeds are subsequently received in respect of the losses, claims, damages, liabilities or expenses in respect of which


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indemnification has been provided, such proceeds will be used to repay the Partnership for the amounts used by it to satisfy such indemnification obligation.

(e) Any indemnification hereunder shall be satisfied solely out of the assets of the Partnership. In no event may an Indemnitee subject any of the Partners to personal liability by reason of these indemnification provisions.

(f) An Indemnitee will not be denied indemnification in whole or in part under this Section 9.3 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement; provided, however, that such indemnification will extend only to such Indemnitee’s activities with respect to or on behalf of the Partnership, and not to such Indemnitee’s other interest in the transaction.

(g) The indemnification provided in this Section 9.3 is for the benefit of the Indemnitees and will not be deemed to create any right to indemnification for any other Persons.

(h) To the fullest extent permitted by law, the debts, liabilities and obligations (whether arising under this Agreement, in contract, tort or otherwise) of the Partnership will be solely the debts, liabilities and obligations of the Partnership, and no Partner, agent or representative of the Partnership (including any Person who formerly held such status) will be liable or shall be obligated personally for any such debt, liability or obligation of the Partnership solely by reason of such status. No individual trustee, officer, director, shareholder, member, manager, managing member, constituent partner, employee or agent of the General Partner, the Manager, their Affiliates or any Partners (subject to the terms hereof and as required by law), in his, her or their individual capacity as such, will have any personal liability for the performance of any obligation of the General Partner, the Manager, their Affiliates or such Partner under this Agreement

9.4 Inspection Rights.

At any time before the Partnership’s complete liquidation, each Limited Partner, or a designee thereof, at its own expense may (i) fully examine and audit the Partnership’s books, records, accounts and assets, including bank account balances, and (ii) examine, or request that the General Partner furnish, such additional information as is reasonably necessary to enable the requesting Partner to review the state of the activities of the Partnership; provided, however, that the General Partner can obtain such additional information without unreasonable effort or expense. Any such examination or audit will be made (i) only upon reasonable prior written notice to the General Partner, (ii) during normal business hours or as specified by the General Partner, and (iii) without undue disruption. Notwithstanding the foregoing, the General Partner will have the benefit of any confidential information provisions of the DRULPA and the obligation to make Partnership Information available or to furnish Partnership Information shall be subject to Section 9.5.

9.5 Confidentiality.

(a) A Limited Partner’s rights to access or receive any information about the Partnership, its assets and the Partnership’s affairs, including (i) information to which a Limited Partner is provided access under Section 9.4 or otherwise as required by law; (ii) financial statements,


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reports and other information provided under Section 6.5; and (iii) the offering documents for the Partnership, this Agreement, any Subscription Documents and any other related agreements (the “Partnership Information”), are conditioned on such Limited Partner’s willingness and ability to assure that the Partnership Information will be used solely by such Limited Partner for purposes reasonably related to such Limited Partner’s interest as a Limited Partner, and that such Partnership Information will not become publicly available as a result of such Limited Partner’s rights to access or receive such Partnership Information, and each Limited Partner agrees not to use Partnership Information other than for purposes of evaluating, monitoring or protecting its investment in the Partnership.

(b) Each Limited Partner acknowledges the General Partner’s belief that the Partnership Information includes trade secrets of the Partnership and that the release of any such Partnership Information would cause competitive harm to the Partnership, the General Partner and/or the Partners. Each Limited Partner agrees to maintain any Partnership Information provided to it in the strictest confidence and not to disclose the Partnership Information to any Person including a prospective transferee of such Partner’s Units, without the written prior consent of the General Partner. Notwithstanding the foregoing, the General Partner consents to the disclosure by a Limited Partner to its accountants, attorneys and similar advisors bound by a duty of confidentiality. With respect to any Limited Partner, the obligation to maintain the Partnership Information in confidence shall not apply to any Partnership Information (i) that becomes publicly available (other than by reason of a disclosure by a Limited Partner), (ii) the disclosure of which by such Limited Partner has been consented to by the General Partner in writing, or (iii) the disclosure of which by such Limited Partner is required by a court of competent jurisdiction or other governmental authority or otherwise as required by law. Before any Limited Partner discloses Partnership Information pursuant to clause (iii), such Limited Partner will promptly, and in any event prior to making any such disclosure, notify the General Partner of the court order, subpoena, interrogatories, government order or other reason that requires disclosure of the Partnership Information so that the General Partner may seek a protective order or other remedy to protect the confidentiality of the Partnership Information. If a protective order or other remedy cannot be obtained, such Limited Partner may disclose only that Partnership Information that its counsel advises in writing that it is legally required to disclose.

(c) Each Limited Partner must promptly inform the General Partner if it becomes aware of any reason, whether under law, regulation, policy or otherwise, that it (or any of its equity holders) will, or might become compelled to, use the Partnership Information other than as contemplated by Section 9.5(a) or disclose Partnership Information in violation of the confidentiality restrictions in Section 9.5(b) (disregarding clause (iii) thereof).

(d) Notwithstanding any other provision of this Agreement, with the exception of the tax return information to be provided to each Partner pursuant to this Agreement, the General Partner will have the right not to provide any Limited Partner, for such period of time as the General Partner in good faith determines to be advisable, with any Partnership Information that such Limited Partner would otherwise be entitled to receive or to have access to pursuant to this Agreement or the DRULPA if: (i) the Partnership or the General Partner is required by law or by agreement with a third party to keep such Partnership Information


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confidential; (ii) the General Partner in good faith believes that the disclosure of such Partnership Information to such Limited Partner is not in the best interest of the Partnership or could damage the Partnership or the conduct of the affairs of the Partnership (which may include a determination by the General Partner that such Limited Partner (or any of its equity holders) is disclosing or may disclose such Partnership Information (or may be compelled to disclose such Partnership Information) or has not indicated a willingness to protect Partnership Information from being disclosed (or compelled to be disclosed) and that the potential of such disclosure by such Limited Partner (or any of its equity holders) is not in the best interest of the Partnership or could damage the Partnership or the conduct of the affairs of the Partnership) or (iii) such Limited Partner has notified the General Partner of its election not to have access to, or to receive, such Partnership Information.

(e) The Limited Partners acknowledge and agree that: (i) the Partnership, the General Partner and Affiliates of the General Partner may acquire confidential information related to third parties that under fiduciary, contractual, legal or similar obligations may not be disclosed to the Limited Partners without violating such obligations; and (ii) neither the Partnership, the General Partner nor Affiliates of the General Partner will be in breach of any duty under this Agreement or the DRULPA in consequence of acquiring, holding or failing to disclose Partnership Information to a Limited Partner so long as such obligations were undertaken in good faith.

(f) In addition to any other remedies available at law, the Partners agree that the Partnership will be entitled to equitable relief, including, without limitation, the right to an injunction or restraining order (without the necessity of proving damages or posting a bond or other security), as a remedy for any failure by a Limited Partner to comply with its obligations with respect to the use and disclosure of Partnership Information, as provided in Section 9.5(a) and (b).

(g) Each Limited Partner agrees to cooperate with such procedures and restrictions as may be developed by the General Partner from time-to-time in connection with the disclosure of non-public information concerning the General Partner and the Partnership, as determined by the General Partner to be reasonably necessary and advisable to maintain and promote compliance with legal and other regulatory matters applicable to the General Partner, the Partnership and the Limited Partners, including securities laws and regulations.

(h) Each Limited Partner acknowledges and agrees that the General Partner may consider the different circumstances of Limited Partners with respect to the restrictions and obligations imposed on Limited Partners in this Section 9.5 and the provision of information under this Agreement, and the General Partner may modify any of such restrictions and/or obligations with respect to a Limited Partner with the consent of such Limited Partner. Each Limited Partner further acknowledges and agrees that any such agreement by the General Partner with a Limited Partner to modify any of the restrictions and/or obligations imposed by this Section 9.5 (or to withhold Partnership Information) will not constitute a breach of any duty stated or implied in law or in equity to any Limited Partner, regardless of whether different agreements are reached with different Limited Partners.


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(i) The provisions of this Section 9.5 will survive the withdrawal of any Partner or the Transfer of any Partner’s interest in the Partnership and will be enforceable against such Partner after such withdrawal or Transfer.

ARTICLE 10. TRANSFERS AND WITHDRAWALS

10.1 Transfer Limitation.

Except as provided in this Article 10, no Unit may be Transferred, in whole or in part. Any attempted Transfer in violation of this Article 10 will be void ab initio.

10.2 Permissible Transfers.

(a) No Limited Partner may Transfer any portion of its Units without first obtaining the written consent of the General Partner, which consent may be withheld for any reason; provided,however, that such consent will not be required for a Transfer of a Unit (or portion thereof) by a Limited Partner to an Affiliate of such Limited Partner if all of the conditions relating to the applicable Transfer contained in Section 10.2(b) are satisfied; and provided, further, that upon the death of an individual Limited Partner, the rights and obligations of such Limited Partner will accrue to his or her estate, and the consent of the General Partner will not be required with respect to such event. The General Partner may not grant its consent to any Transfer for purposes of this Section 10.2 if such Transfer would cause the Partnership to be treated for federal income tax purposes as a publicly traded partnership taxable as a corporation, or as an investment company required to be registered under the 1940 Act.

(b) Notwithstanding anything to the contrary contained in this Section 10.2, in no event may all or any part of the Units of a Limited Partner be Transferred (including pursuant to Section 10.2(a)), unless all of the following conditions are satisfied or waived by the General Partner:

(1) the transferor or transferee has delivered to the General Partner an opinion of counsel reasonably acceptable to the General Partner that the Transfer would not require registration under the Securities Act or any state securities laws;

(2) the transferor or transferee has delivered to the General Partner an opinion of counsel reasonably acceptable to the General Partner that the Transfer will not adversely affect the status of the Partnership as a partnership under Subchapter K of the Code for federal income tax purposes, or cause the Partnership to become a “publicly traded partnership” within the meaning of Code §7704, or cause the Partnership to have to register as an investment company under the 1940 Act;

(3) any required third party consent or approval to the Transfer has been obtained or waived, including the consent of any lender providing financing to the Partnership to the extent required under the terms of such financing;


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(4) the General Partner is satisfied that the Transfer will not result in the Partnership being considered a “publicly traded partnership” as defined by Code §7704(b);

(5) the General Partner is satisfied that the Transfer, when considered in the aggregate with all other Transfers of Units within the preceding 12-month period, would not result in the Partnership being considered to have terminated within the meaning of Code §708;

(6) the General Partner has received an agreement in form and substance satisfactory to it that the transferee agrees to be bound by the terms and conditions set forth in this Agreement and making such representations and warranties as the General Partner determines to be advisable and in the best interest of the Partnership;

(7) the transferor or transferee bears all costs and expenses of the Transfer and the transferor’s admission to the Partnership, including the actual legal fees of the Partnership; and

(8) the transferor and the transferee execute, acknowledge and deliver to the Partnership such other certificates, instruments and documents as the General Partner deems reasonably necessary, appropriate or desirable to effect the Transfer or the transferee’s admission to the Partnership.

Upon request by the transferor, the General Partner must provide such certifications as to factual matters that the General Partner knows to be true with respect to the Partnership and the Partners, other than the transferor, as may reasonably be required in connection with the giving of any opinion of counsel required by this Section 10.2(b).

Except as expressly provided in this Agreement and the DRULPA, no event affecting a Limited Partner other than death (including bankruptcy or insolvency) will affect this Agreement.

10.3 Substitute Partner.

A transferee of any Partner may become a substituted Limited Partner, as to the Units transferred, in place of the transferor only upon the written consent of the General Partner, which consent may be withheld without reason or cause. The General Partner has the right to become a substituted Limited Partner. Unless a transferee of any Unit becomes a substituted Limited Partner in accordance with the provisions of this Agreement, such transferee will not be entitled to any of the rights granted to a Partner hereunder other than the right to receive all or part of the share of the income, gains, losses, deductions, expenses, credits, distributions, or returns of capital to which its transferor would otherwise be entitled with respect to the transferred interest.

10.4 Assignment of the General Partner’s Units.

The General Partner shall not Transfer any portion of its interest in the Partnership (other than to an Affiliate of the General Partner) without the consent of the Majority of Limited Partners.


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10.5 Substitute General Partner.

A transferee of any portion of the Partnership interest of the General Partner that is transferred in accordance with the provisions of this Agreement will be admitted to the Partnership as a general partner, effective as of the date of such Transfer. A successor to all of the Partnership interest of the General Partner must carry on the business of the Partnership without dissolution.

10.6 Allocations Between Transferor and Transferee.

If any Transfer of a Unit occurs during a Fiscal Year, Article 7 and Article 8will be applied to the transferor and transferee on the basis of an interim closing of the books of the Partnership as of the date of such Transfer.

10.7 Redemption.

(a) Limited Partners who have held their Units for at least one year may request that the Partnership repurchase all, but not less than all, of their Units. A Limited Partner’s ability to request a redemption under this Section 10.7 may not be construed to mean a Limited Partner has any right to demand or receive the return of such Limited Partner’s Capital Contribution or otherwise modify the limitations of Section 5.4. A Limited Partner wishing to have Units repurchased must mail or deliver in writing a request to the Partnership indicating such desire. The purchase price for a redeemed Unit will be the Redemption Price Per Unit as of the close of business on the applicable redemption date minus any fees incurred by the Partnership in connection with the redemption, with such fees to not exceed 2% of such Limited Partner’s Capital Contributions. The “Redemption Price Per Unit” means (1) for redemptions made through the Final Closing, 97% of the price paid by the Limited Partner for such Unit less any Commissions and Organization and Offering Expenses paid in respect of such Unit; or (2) for redemptions made after the Final Closing, 97% of (x) the Net Asset Value divided by (y) the aggregate number of Units of the Partnership; and in either option (1) or (2), less the Performance Allocation.

(b) The Partnership intends to redeem Units on a quarterly basis on the last business day of each calendar quarter and will not redeem in excess of 10% of the Units during any 12-month period, provided that the Partnership will not redeem any Units held by a Limited Partner prior to the time that is 60 calendar days after the Partnership receives the required written notice from the Limited Partner. The General Partner reserves the right in its sole discretion at any time and from time to time to (1) reject any request for redemption, (2) change the Redemption Price Per Unit or prior notice period for redemptions, or (3) terminate, suspend and/or reestablish the Partnership’s redemption program. The General Partner will determine from time to time whether the Partnership has sufficient excess cash from operations to repurchase Units. Generally, the cash available for redemptions will be limited to 10% of the Partnership’s operating cash flow from the previous fiscal year. If the funds set aside for the redemption program are not sufficient to accommodate all requests as of any calendar quarter end, then at such future time, if any, when sufficient funds become available in the General Partner’s sole discretion, pending requests will be honored among all requesting Limited Partners in accordance with their order of receipt.


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10.8 Representations Regarding Transfers.

Each Limited Partner hereby covenants and agrees with the Partnership for the benefit of the Partnership and all Partners, that: (i) it is not currently making a market in Units and will not in the future make a market in Units; (ii) it will not Transfer its Units on an established securities market, a secondary market (or the substantial equivalent thereof) within the meaning of Code §7704(b) (and any Regulations, proposed Regulations, revenue rulings, or other officialpronouncements of the Internal Revenue Service or the Treasury Department that may be promulgated or published thereunder); and (iii) in the event such Regulations, revenue rulings, or other pronouncements treat any or all arrangements which facilitate the selling of Units (commonly referred to as “matching services”) as being a secondary market or the substantial equivalent thereof, no Limited Partner will Transfer any Units through a matching service that is not approved in advance by the General Partner.

10.9 Parties Not Bound to See to Trust or Equity.

Neither the Registrar and Transfer Agent nor the General Partner will be bound to see to the execution of any trust (whether express, implied or constructive), charge, pledge, or equity to which any Unit or any interest under this Agreement is subject, nor to ascertain or inquire whether any sale or assignment of any Unit or any interest under this Agreement by any Limited Partner is authorized by such trust, charge, pledge or equity, nor to recognize any Person as having any interest in any Unit, except for the Person recorded on the Register as the holder of such Unit. The Partnership, the General Partner and the Registrar and Transfer Agent will be entitled to treat the Person in whose name any Unit is registered as the absolute owner for all purposes. The receipt by any Person in whose name a Unit is recorded on the Register will be a sufficient discharge for all monies, securities and other property payable, issuable or deliverable for such Unit and from all liability therefor.

10.10 Compulsory Transfer or Acquisition of Units.

(a) If it comes to the attention of the General Partner that any Unit is or may be owned or held directly or beneficially by any Person whose holding or continued holding of that Unit (whether on its own or in conjunction with any other circumstance appearing to the General Partner to be relevant) might in the sole and conclusive determination of the General Partner be likely to cause an Adverse Effect, the General Partner may serve a notice (a “Transfer Notice”) upon the Person (or any one of such Persons where the Unit is registered in joint names) appearing in the Register of Limited Partners as, the holder (the “Vendor”) of the Unit (the “Relevant Unit”) requiring the Vendor within 21 calendar days (or such extended time as in all the circumstances the General Partner shall consider reasonable) to transfer (and/or procure the disposal of interests in) the Relevant Unit to another Person whose holding of the Relevant Unit, in the sole and conclusive determination of the General Partner, would not be likely to cause an Adverse Effect (such Person, an “Eligible Transferee”). On and after the date of the Transfer Notice, and until registration of a transfer of the Relevant Unit to which it relates under the provisions of this Section 10.10(a) or Section 10.10(b) below, the rights and privileges attaching to the Relevant Unit will be suspended and not capable of exercise.


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(b) If within 21 calendar days after the giving of a Transfer Notice (or such extended time as in the circumstances the General Partner considers reasonable) the Transfer Notice has not been complied with to the satisfaction of the General Partner, the General Partner may arrange for the Partnership to compulsorily reacquire some or all of the Relevant Unit for the price for the Unit paid by the Vendor without interest.

(c) A Person who becomes aware that his holding, directly or beneficially, of the Unit will, or is likely to, cause an Adverse Effect, and who has not already received a Transfer Notice under Section 10.10(a) above, shall immediately either transfer the Unit to an Eligible Transferee or Transferees or give a request in writing to the General Partner for the issue of a Transfer Notice under Section 10.10(a) above, provided that any such Transfer complies with Section 10.2.

(d) Subject to the provisions of this Agreement, the General Partner will be entitled to assume without inquiry that none of the Units are held in such a way as to entitle the General Partner to serve a Transfer Notice in respect of the Unit, unless it has actual knowledge of a reason to believe otherwise. However, the General Partner may call upon any holder (or any one of joint holders) of the Unit by notice in writing to provide such information and evidence as it will require upon any matter connected with or in relation to such holder or joint holders of the Unit. If such information and evidence is not provided within such reasonable period (being not less than 21 calendar days after service of the notice requiring the same) as may be specified by the General Partner in the notice, the General Partner may, in its absolute discretion, treat any Unit held by such a holder or joint holders as being held in such a way as to entitle the General Partner to serve a Transfer Notice for the Unit.

(e) The General Partner will not be required to give any reasons for any decision, determination or declaration taken or made under this Section 10.10. The exercise of the powers conferred by this Section 10.10 will not be questioned or invalidated in any case on the ground that there was insufficient evidence of direct or beneficial ownership of the Unit by any Person or that the true direct or beneficial owner of any Unit was otherwise than appeared to the General Partner at the relevant date provided that such powers have been exercised in good faith.

ARTICLE 11. WINDING UP

11.1 Events Requiring Winding Up.

(a) Except as provided in Section 11.1(b), no Partner has the right to wind up the Partnership.

(b) The Partnership will be wound up upon the first to occur of the following events:

(1) at any time, if the General Partner elects to wind up the Partnership;

(2) the expiration of the Partnership Term;

(3) the sale of all or substantially all of the Partnership’s assets;


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(4) at any time, with the written consent of all Partners to wind up and terminate the Partnership;

(5) an event of withdrawal by the General Partner (or, where the General Partner is removed under Section 3.10, the failure of the Limited Partners to appoint a successor general partner); or

(6) a decree by a court requiring the winding up or dissolution of the Partnership pursuant to the DRULPA.

A withdrawal by a General Partner will not be a breach of this Agreement. The General Partner must provide written notice of its intention to withdraw to each of the Limited Partners at least 30 days prior to its withdrawal from the Partnership.

11.2 Election to Continue the Partnership.

To the extent permitted by the DRULPA, upon the occurrence of an event described in Section 11.1(b)(2), 11.1(b)(3), 11.1(b)(4) or 11.1(b)(5), the Partnership will not be wound up and its business will be continued, and its properties and assets will not be liquidated, if, within 90 days (or such longer period permitted by law) after the occurrence of such event, a Supermajority of Limited Partners agree in writing to continue the Partnership and, if there is no remaining general partner of the Partnership, to elect a Person to be admitted to the Partnership as successor general partner thereof, who will be required to acquire at least a one-tenth of one percent (0.1%) interest in the capital, profits and losses of the Partnership and assume all of the obligations of the General Partner. Upon the satisfaction of all conditions necessary to the continuation of the Partnership, including the admission of a successor general partner thereof and the amendment of the Partnership’s Certificate to the extent required by applicable law, the Partnership will be continued without any further consent or approval of any Partner, in which case the Partnership will continue to conduct the business of the Partnership with the Partnership’s properties and assets in accordance with, and the Partnership and interests of the Partners will continue to be governed by, the terms of this Agreement. If the business of the Partnership is continued pursuant to this Section 11.2, any withdrawing General Partner’s interest in the Partnership shall be converted into the interest of a Limited Partner, and the interest in the Partnership acquired by the successor general partner will (if acquired from the Partnership) reduce the interests of all other Partners (including the withdrawing General Partner) ratably in relation to their interest in the Partnership prior to such reduction.

11.3 Winding Up.

(a) Upon the occurrence of an event requiring winding up described in Section 11.1(b) (and provided that no election to continue the Partnership has been made pursuant to Section 11.2), the Partnership will continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners, as required by law. No Partner may take any action that is inconsistent with the winding up of the Partnership’s business and affairs. The General Partner will be responsible for overseeing the winding up and dissolution of the Partnership and will take full account of the Partnership’s liabilities and property and the Partnership property will be liquidated as


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promptly as is consistent with maximizing the realizable value thereof. In this regard, a reasonable time will be allowed after an event requiring winding up occurs for the orderly winding up of the business and affairs of the Partnership and the liquidation of its assets in order to minimize any losses otherwise attendant upon such winding up, and the provisions of this Agreement shall remain in effect between the Partners during the period of winding up and liquidation. To the fullest extent permitted by law, the proceeds realized by the Partnership from the liquidation of its assets will be applied and distributed in the following order:

(1) first, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors (other than to Partners);

(2) second, to the payment and discharge of any debts owed the Partners, including any Partnership Expenses paid by the General Partner or any Affiliate on behalf of the Partnership for which the General Partner or Affiliate has not been reimbursed by the Partnership; and

(3) the balance, if any, shall be distributed to the Partners in accordance with Section 8.3.

(b) Notwithstanding the provisions of Section 11.3(a), which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, to the extent permitted by law, if prior to or upon an event requiring winding up of the Partnership the General Partner determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the General Partner may defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors). The General Partner must use commercially reasonable efforts to make any distributions contemplated by Section 11.3(a) in cash; provided, however, that if the General Partner determines that it would be advisable and in the best interests of the Partners to distribute Partnership assets in kind, the General Partner may make distributions in liquidation of the Partnership in kind in lieu of cash in accordance with Section 11.3(a). Any such distributions in kind will be subject to the following rules and conditions.

(1) The General Partner will determine the fair market value of each Partnership asset. All Partnership assets will be valued at their current fair market value as determined in good faith by the General Partner.

(2) The assets to be distributed in kind shall be distributed in undivided interests such that each Partner receives its proportionate interest in each such asset distributed in kind.

(3) The assets to be distributed in kind will be deemed to have been sold for their fair market value determined pursuant to this Agreement, and immediately prior to the distribution, the Net Profit or Net Loss resulting from such deemed sale shall be allocated to the Capital Accounts of the Partners pursuant to Article 7.

(4) The General Partner may cause the distributed assets to be subject to such agreements, conditions and restrictions relating to the disposition, management and operation of such assets as the General Partner deems reasonable and equitable.


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11.4 Rights of Limited Partners.

Except as otherwise provided in this Agreement, the Limited Partners will look solely to the assets of the Partnership for the return of their Capital Contributions and will have no right or power to demand or receive property other than cash from the Partnership.

11.5 Termination of Partnership.

Upon the completion of the liquidation of the Partnership’s cash and property as provided in Section 11.3, the Partnership will be terminated, a certificate of termination shall be filed, all qualifications of the Partnership as a foreign limited partnership will be canceled, and such other actions as may be necessary to terminate the Partnership shall be taken.

11.6 Waiver of Partition.

Each Partner hereby waives any right to partition of the Partnership’s property.

11.7 Negative Capital Accounts.

Except as provided in this Agreement, no Partner will be liable to the Partnership or to any other Partner for any negative balance outstanding in such Partner’s Capital Account.

ARTICLE 12. POWER OF ATTORNEY

12.1 Power of Attorney.

Each Limited Partner constitutes and appoints the General Partner and its authorized partners, directors, managers, members and officers, and each of them acting singly, in each case with full power of substitution and resubstitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to execute, swear to, seal, acknowledge, deliver, file and record in the appropriate public offices the following: (i) all certificates, documents and other instruments (including this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability to the extent provided by applicable law) in the State of Delaware and in all other jurisdictions in which the Partnership may or plans to conduct business or own property; (ii) all instruments that the General Partner deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement that is authorized in accordance with the terms of this Agreement, including the terms requiring any vote, consent, approval or agreement on the part of the Limited Partners as a condition to such amendment, change, modification or restatement; (iii) all conveyances and other instruments or documents that the General Partner deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including a certificate of cancellation; (iv) all instruments relating to the admission, withdrawal, removal or substitution of any Partner or the Capital Contributions of any Partner pursuant to the terms of this Agreement; (v) all certificates, documents and other instruments relating to any determination of the rights, preferences and privileges of Units that are authorized in accordance with the terms of this


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Agreement, including the terms requiring any vote, consent, approval or agreement on the part of the Limited Partners as a condition to such determination; (vi) all conveyances and other instruments or documents that the General Partner deems appropriate or necessary to effectuate a transfer of Units pursuant to the terms of this Agreement; and (vii) all ballots, consents, approvals, waivers, certificates and other instruments that the General Partner deems appropriate or necessary to evidence or confirm any vote, consent, approval, agreement or other action that is made or given by the Partners in accordance with the terms of this Agreement.

12.2 Duration of Power.

The power of attorney granted herein is hereby declared to be irrevocable and a power coupled with an interest in recognition of the fact that each of the Partners will be relying upon the power of the General Partner to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and such power of attorney shall survive and not be affected by the subsequent incapacity of any Limited Partner and the transfer of all or any portion of any Limited Partner’s Units, will survive the bankruptcy or insolvency of any Limited Partner and will extend to any Limited Partner’s successors, assigns and personal representatives. Each Limited Partner (i) will be bound by any action taken by the General Partner in accordance with this Agreement, acting in good faith pursuant to such power of attorney; (ii) waives any and all defenses that may be available to contest, negate or disaffirm any action of the General Partner that is taken pursuant to the authority expressly granted under such power of attorney and is in accordance with the terms of this Agreement, including the terms requiring any vote, consent, approval or agreement on the part of the Limited Partners as a condition to the taking of any action; and (iii) must execute and deliver to the General Partner, within 30 days after receipt of the General Partner’s request therefor, such further designation, powers of attorney and other instruments as the General Partner deems necessary to effectuate this Agreement and the purposes of the Partnership.

ARTICLE 13. MISCELLANEOUS

13.1 Amendments.

This Agreement generally may be modified or amended at any time with the affirmative written consent of the General Partner and the Majority of Limited Partners; provided, however, that each adversely affected Partner must approve an amendment that would (i) reduce such Partner’s Capital Account, (ii) convert a Limited Partner’s interest into a General Partner’s interest or modify the limited liability of a Limited Partner or (iii) amend the provisions of this Agreement relating to amendments, including this Section 13.1; and provided, further, that the General Partner has the power, without the consent of any Limited Partner, to amend this Agreement as may be required to (i) reflect the admission, substitution, termination, or withdrawal of Partners or of additional classes of Units in accordance with this Agreement; (ii) reflect a change in the name of the Partnership; (iii) make a change that is necessary or, in the opinion of the General Partner, advisable to qualify the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or foreign jurisdiction, or ensure that the Partnership will not be treated as an association taxable as a corporation or as a publicly traded partnership taxable as a corporation for federal income tax purposes; (iv) make a change that does not adversely affect the Limited Partners in any material respect; (v) make a change that is


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necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, statute, ruling or regulation of any federal, state or foreign governmental entity, so long as such change is made in a manner that minimizes any adverse effect on the Limited Partners; (vi) make a change that is required or contemplated by this Agreement; (vii) make a change in any provision of the Agreement that requires any action to be taken by or on behalf of the General Partner or the Partnership pursuant to applicable Delaware law if the provisions of applicable Delaware law are amended, modified or revoked so that the taking of such action is no longer required; (viii) prevent the Partnership from in any manner being deemed an “investment company” subject to the provisions of the 1940 Act; (ix) create a new class of interests subject to different terms than the classes currently in existence (including, without limitation, with respect to withdrawal rights, management fee and/or performance allocation), such ability not to be limited by (iv) above; (x) address legal, tax, regulatory, accounting or other similar issues affecting one or more Partners; (xi) make a change if any statute, rule or regulation is enacted or promulgated or the Internal Revenue Service issues any notice or announcement that affects the U.S. federal income taxation treatment of the income or gain related to the Performance Allocation (a “Change in Tax Treatment”), so that the Special Partner (or its partners) are in the same after-tax position as each would have been had such Change in Tax Treatment not been enacted, promulgated or issued; (xii) make any change, correct or supplement any provision herein relating to the Partnership Audit Rules, or to authorize the Partnership Representative, in its capacity as such, to undertake any action on account of the Partnership Audit Rules; or (xiii) make any other amendments similar to the foregoing.

13.2 Complete Agreement.

This Agreement (together with the Subscription Documents) constitutes the complete and exclusive statement of the agreement among the Partners with respect to the subject matter hereof and replaces and supersedes any prior oral or written agreements by and among the Partners.

13.3 Governing Law.

This Agreement and the rights of the parties hereunder shall be governed by, interpreted and enforced in accordance with, the internal laws (exclusive of the choice of law provisions thereof) of the State of Delaware as to all matters, including matters of validity, construction, effect, performance and remedies.

13.4 Binding Effect.

Subject to the provisions of this Agreement relating to transferability, this Agreement will be binding upon and inure to the benefit of the parties’ signatory hereto, and their respective transferees, successors and assigns.

13.5 Interpretation.

Common nouns and pronouns will be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or corporation may in the context require. All headings, titles or captions herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. Numbered or lettered articles, Sections and subsections herein contained refer to articles, Sections


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and subsections of this Agreement unless otherwise expressly stated. Words such as “herein,” “hereinafter,” “hereof,” “hereto,” “hereby” and “hereunder,” when used with reference to this Agreement, refer to this Agreement as a whole, unless the context otherwise requires. Except as otherwise provided in this Agreement, all actions that the General Partner may take and all determinations that the General Partner may make pursuant to this Agreement may be taken and made at the sole and absolute discretion of the General Partner. If any provision of this Agreement or the application thereof to any person or circumstances is or becomes invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

13.6 Multiple Counterparts.

This Agreement may be executed in several counterparts (including by execution of the Subscription Documents), each of which will be deemed an original, but all of which will constitute one and the same instrument. However, in making proof hereof it will be necessary to produce only one copy hereof signed by the party to be charged. Signatures of the parties transmitted by facsimile, PDF or other electronic file will be deemed to be their original signatures for all purposes and the exchange of copies of this Agreement and of signature pages by facsimile transmission, PDF or other electronic file will constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy, PDF or other reproduction hereof.

13.7 Execution of Documents.

Each party hereto agrees to execute, with acknowledgment or affidavit, if required, any and all documents and writings that may be necessary or expedient in connection with the creation of the Partnership and the consummation of any of the transactions expressly provided for in this Agreement.

13.8 Reliance on Authority.

In no event will any person dealing with the General Partner be obligated to ascertain that the terms of this Agreement have been complied with, or be obligated to inquire into the necessity or expediency of any act or action of the General Partner. Every contract, agreement, deed, or other instrument or document executed by the General Partner with respect to the Partnership will be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and/or delivery thereof, this Agreement was in full force and effect, (ii) such instrument or document was duly executed in accordance with the terms and provisions of this Agreement and is binding upon the Partnership and all of the Partners thereof, and (iii) the General Partner was duly authorized and empowered to execute and deliver any and every such instrument or document for and on behalf of the Partnership.

13.9 No Third Party Beneficiary.

This Agreement is made solely and specifically among and for the benefit of the parties hereto, and their respective successors and assigns (except that the provisions of Section 9.3 will inure to


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the benefit of each of the Indemnitees), and no other Person (except to the extent provided in the immediately preceding parenthetical) will have any rights, interest or claims hereunder or be entitled to any benefits under or on account of this Agreement as a third-party beneficiary or otherwise. No third party, including any creditor of the Partnership, will have any right to enforce any contribution of capital or other advance of funds by any Partner.

13.10 Notices.

All notices and other communications provided for herein must be given or made by telecopy or in writing and telecopied, mailed or delivered to the intended recipient at the address set forth in each Partner’s Subscription Documents and reflected in the List of Partners. All such communications shall be deemed to have been duly given when transmitted by telecopy or email, or personally delivered or, in the case of a mailed notice, upon depositing the notice in the mail, postage prepaid and return receipt requested, in each case given or addressed as aforesaid. Any party hereto may, at any time by giving ten days’ prior written notice to the other parties hereto, designate any other address in substitution of the foregoing address to which such notice shall be given.

13.11 Waiver.

No failure by any party to insist upon strict performance of any covenant, duty, agreement or condition of this Agreement or to the exercise of any right or remedy resulting from a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

13.12 Liability.

In no circumstances shall a shareholder, limited partner, director, officer, manager, member, employee or agent of a Partner, or a partner in or member or trustee of a Partner, be personally liable for any of the obligations of a Partner under this Agreement. In no event will any Limited Partner be or become obligated personally to respond in damages to the Partnership or any other Partner with respect to this Agreement or on account of its being a Limited Partner, and any claim or judgment in favor of the Partnership or such other Partner shall be limited accordingly so that the Partnership and such other Partner may look only to the Limited Partner’s Units for the recovery of such claim or judgment and not to any of the Limited Partner’s other assets. The Partnership and each of the Partners waives and disclaims any right it may have to proceed against any other Limited Partner other than to the extent of such Limited Partner’s Units.

13.13 Legal Counsel.

Each Partner hereby agrees and acknowledges that (i) counsel has been retained by the General Partner (“Legal Counsel”) to form and represent the Partnership and in such capacity has provided legal services to the Partnership, the General Partner, and their Affiliates; (ii) Legal Counsel has not represented, nor will it represent, the Limited Partners in connection with the formation and organization of the Partnership, the acquisition of their Units, the management and operation of the Partnership, or any dispute that may arise between the Partnership and any Limited Partner (each, a “Partnership Legal Matter”); (iii) neither this Agreement nor the transactions contemplated hereby relating to the representation by Legal Counsel are intended to create an attorney/client or


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any other relationship between Legal Counsel and any Limited Partner; (iv) the Limited Partners should, if they desire counsel on a Partnership Legal Matter, retain their own independent counsel with respect thereto and will be individually liable for all fees and expenses of such independent counsel; (v) Legal Counsel may represent the Partnership and/or General Partner in connection with any and all Partnership Legal Matters; and (vi) Legal Counsel may represent any Limited Partner or their Affiliates on other matters.

Remainder of Page Intentionally Left Blank. Signature Pages Follow


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IN WITNESS WHEREOF, the General Partner, the Initial Limited Partner, the Special Partner and the Limited Partners have executed this Agreement of Limited Partnership, effective as of the date as provided above.

GENERAL PARTNER:

GPB HOLDINGS III GP, LLC a Delaware limited liability company

By: GPB Capital Holdings, LLC as Managing Member

By:Name: David Gentile Title: Chief Executive Officer

INITIAL LIMITED PARTNER:

David Gentile

SPECIAL PARTNER:

GPB H3 SLP, LLC a Delaware limited liability company



LIMITED PARTNERS:

All Limited Partners now and hereafter admitted pursuant to the powers of attorney now and hereafter granted to the General Partner.

GPB HOLDINGS III GP, LLC as duly appointed attorney-in-fact for the Limited Partners.





$1,500,000,000



January 2018 ________________________________________________________

EXHIBIT B

DISCLOSURE BROCHURE OF GPB CAPITAL HOLDINGS, LLC


Item 1: Cover Page

GPB CAPITAL HOLDINGS, LLC

535 West 24th Street New York, New York 10011

Tel: (212) 235-2650 www.gpb-cap.com

Part 2A of Form ADV (the “Brochure”)

March 30, 2017

This Brochure provides information about the qualifications and business practices of GPB Capital Holdings, LLC. If you have any questions about the contents of this Brochure, or to request a current copy of it free of charge, please contact Jeffrey Schultz at (212) 235-2658 or [email protected]. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state securities authority.

Additional information about GPB Capital Holdings, LLC also is available on the SEC’s website at www.adviserinfo.sec.gov. An investment adviser’s registration with the SEC does not imply a certain level of skill or training.


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Item 2: Material Changes

This Brochure, dated March 30, 2017, includes certain changes from the most recent previous version of the Brochure, dated April 27, 2016, to reflect certain updates to fees and expenses, risks, conflicts of interest, and financial industry activities and affiliations. Please see Items 5, 6, 8 and 10 below for additional details.


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Item 3: Table of Contents

Item 1: Cover Page ................................................................................................................................. 1Item 2: Material Changes ........................................................................................................................ 2Item 3: Table of Contents ....................................................................................................................... 3Item 4: Advisory Business ...................................................................................................................... 4Item 5: Fees and Compensation .............................................................................................................. 4Item 6: Performance-Based Fees and Side-by-Side Management ............................................................ 7Item 7: Types of Clients ......................................................................................................................... 8Item 8: Methods of Analysis, Investment Strategies, and Risk of Loss .................................................... 8Item 9: Disciplinary Information ........................................................................................................... 23Item 10: Other Financial Industry Activities and Affiliations ................................................................ 23Item 11: Code of Ethics, Participation or Interest in Client Transactions, and Personal Trading ............. 24Item 12: Brokerage Practices ................................................................................................................ 25Item 13: Review of Accounts ................................................................................................................ 25Item 14: Client Referrals and Other Compensation ............................................................................... 26Item 15: Custody .................................................................................................................................. 26Item 16: Investment Discretion ............................................................................................................. 26Item 17: Voting Client Securities .......................................................................................................... 26Item 18: Financial Information ............................................................................................................. 27


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Item 4: Advisory Business

GPB Capital Holdings, LLC (“GPB”) is a New York-based global asset and acquisition management firm that structures, manages, promotes, sponsors, and, through itself and affiliate entities, serves as general partner and/or investment manager for various limited partnerships which are generally either exempt investment companies or holding companies (collectively, the “Companies”). GPB was formed in March of 2013 and is owned by David Gentile, its sole member.

GPB has three primary goals for the Companies: To acquire controlling majority (and in many cases, wholly owned) interests in and tooperate income-producing, middle-market private companies primarily in North Americaand primarily focused in the automotive, waste management, managed IT services, energy,healthcare, life sciences and real estate sectors (the “Portfolio Companies”);To provide managerial assistance to Portfolio Companies; andTo develop the operations of Portfolio Companies to increase their cash flow.

GPB’s principals are experienced financial, operational, management and accounting professionals with over 100 years of collective experience working with privately-held companies and their management teams. GPB looks to achieve increased cash flow and profitability of Portfolio Companies by initially focusing on the Companies’ acquisition and operation of Portfolio Companies possessing strong management teams. GPB provides strategic planning and managerial insight, along with a Company’s capital, which is designed to enable Portfolio Companies to attain the next stage of development and profitability and reward management teams that perform well, while also attempting to provide Company investors (“Investors”) with current income and long-term return potential.

Currently, GPB’s only clients are the Companies. The services provided by GPB are tailored as set forth in each Company’s governing documents, which may include a private placement memorandum, subscription agreement and/or limited partnership agreement (collectively, the “Offering Documents”). Therefore, any advice that may be provided in connection with GPB’s services is provided pursuant to a Company’s agreed upon investment objective; investment advice is not tailored pursuant to the objectives of any individual Investor.

As of December 31, 2016, GPB had approximately $245,944,696 in regulatory assets under management on a discretionary basis.

Item 5: Fees and Compensation

GPB receives managerial assistance fees as described in the Companies’ Offering Documents, typically deducted from the Companies’ assets quarterly in advance. The managerial assistance fees are typically based on the Investors’ contributions made to a Company, and the manner in which they are paid will depend on the structure of a particular Company.

Depending on a Company’s Offering Documents, GPB, in its sole discretion, from time to time agrees to a different fee structure for certain Investors, which may include employees of GPB, their relatives and certain other Investors bearing reduced or no managerial assistance fees.

Fees may differ between the Companies and each Investor must review the relevant Company’s Offering Documents carefully for a list of the actual fees and expenses.

As provided in the Offering Documents of certain Companies, GPB from time to time assigns all or a portion of its fees to properly licensed third parties (where licensing is required), such as Ascendant Capital,


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LLC, a branch office of Ascendant Alternative Strategies, LLC (together with Ascendant Capital, LLC, “Ascendant”) for services rendered by persons in connection with the offering of interests in a Company (“Interests”).

In addition, as provided in the Offering Documents of certain Companies, a portion of the proceeds from the sale of Interests are from time to time used to pay brokerage fees and commissions, which may include selling commissions, due diligence, marketing and wholesaling fees (collectively, “Selling Fees”) to properly licensed third parties, including but not limited to Ascendant. GPB typically reserves the right to pay Selling Fees that are stated in an Offering Document, and, aggregate Selling Fees will not exceed a certain percentage of the amount of interest subscribed for, which varies by Company but is typically 11%-11.75%, as disclosed in each Company’s Offering Documents. Such Selling Fees are in addition to, and not in lieu of, the managerial assistance fees charged to Investors. Investors should review carefully Item 12 of this Brochure, which discusses conflicts of interest related to brokerage practices.

Moreover, with respect to certain Investors, the Companies will pay broker-dealers, including certain employees, officers and directors of Ascendant, or other affiliates of the Company an annual servicing fee equal to a certain amount of capital contributions attributable to such Investors (the “Servicing Fee”), initially payable upon an investor’s subscription for Interests in a Company and payable annually for so long as such Investor holds an interest in such Company.

Further, as provided in the Offering Documents of certain Companies, a Company will from time to time pay an acquisition fee upon the consummation of any acquisition on behalf of a Company to qualified third parties (other than persons holding any financial interest in the Portfolio Company), Ascendant, or, if permitted pursuant to a Company’s Offering Documents, to GPB, for making the opportunity available, identifying, and/or structuring acquisitions for GPB. Such acquisition fees are in addition to, and not in lieu of, the managerial assistance fees charged to Investors.

In addition, as set forth in the Offering Documents, the Companies pay all costs, expenses (including investment-related travel) and charges incurred with respect to the ownership, operation and maintenance of the Companies and their respective assets (including subsidiary entities the Companies use to hold their Portfolio Company acquisitions, the “Holding Companies”), as determined by GPB, which includes the following expenses: (A) all fees and expenses incurred in connection with: (i) the origination, evaluation (including industry analyses and evaluations), investigation, structuring, acquisition, or disposition of Company assets, including appraisals fees, taxes, brokerage fees, underwriting commissions and discounts, legal, accounting, investment banking, consulting, information services, professional fees and financing fees (including the repayment of those financings and the costs related to establishing and maintaining a credit facility for the Companies); (ii) the carrying or management of the Companies’ assets; (iii) communications with partners; (iv) attorneys’ and accountants’ fees and expenses; (v) the winding up or liquidation of the Companies; (vi) any restructuring or amendments to the constituent documents of the Companies, the General Partner and related entities; (vii) distributions to partners; (viii) any meetings of the Limited Partners; (ix) the registration, qualification or exemption of the Companies under any applicable Federal, state, or local law and all other fees and expenses imposed by any governmental authority with respect to the Companies’ operations or assets; (x) the preparation of financial statements of the Companies, the local, state and federal income, franchise, margin and other tax returns of the Companies, other regulatory reports and filings of the Companies, and all other documents, opinions, appraisals and reports delivered to the Partners; (xi) any litigation, mediation, arbitration or other legal or tax proceeding involving the Companies (including the cost of any investigation and preparation) and the amount of any judgment or settlement paid in connection therewith; (xii) the collection of amounts due to the Companies; (xiii) transactions that are allocated to the Companies but not consummated; (B) taxes (including margin taxes) and other governmental charges levied against the Companies; and (C) insurance, regulatory or litigation expenses (and damages), including those of which GPB is the beneficiary.


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The Companies pay their own operating expenses. GPB is responsible for its or its affiliates’ general and administrative costs and expenses and its day-to-day overhead expenses of managing the Companies and is not entitled to be reimbursed by the Companies for such expenses other than for the portion of the total compensation of the General Partner’s or its affiliates’ (including Ascendant’s) officers and employees relating to the time such officers or employees provide In-House Services or Operations Support Services, both as described below, to the Companies or their respective Portfolio Companies. Such expenses are in addition to, and not in lieu of, the managerial assistance fee. “In-House Services” include but are not limited to finance, tax, accounting, legal, compliance, IT, HR, investor relations, administrative, risk management, operational, administrative and management services to the Companies or their Portfolio Companies. For the avoidance of doubt, any such fees or expenses paid to Ascendant will not otherwise reduce any fees or expenses payable to GPB.

In exercising its discretion to allocate investment opportunities and fees and expenses, GPB is faced with a variety of potential conflicts of interest. For example, in allocating an investment opportunity among Companies with differing fee, expense and compensation structures, GPB has an incentive to allocate investment opportunities to the Companies from which GPB or its related persons, including Ascendant, derives, directly or indirectly, a higher fee, compensation or other benefit. To the extent not allocated to a Portfolio Company, GPB will allocate fees and expenses incurred in the course of evaluating and making investments that are consummated between the Companies in accordance with each Company’s Offering Documents or, to the extent not addressed in such Offering Documents, pro rata based on the respective total capital commitments of such Companies. The appropriate allocation between Companies, Investors and third parties of expenses and fees generated in the course of evaluating potential investments which are not consummated, such as out-of-pocket fees associated with due diligence, attorney fees and the fees of other professionals, will be determined by GPB and its affiliates in their good faith discretion, consistent with the Offering Documents of the Companies, as applicable. If multiple Companies evaluate a potential investment that is not consummated, GPB generally allocates fees and expenses generated in the course of evaluating such investment among such Companies based on the anticipated investment of each Company.There may be occasions when one Company (the “Payor Company”) pays an expense common to multiple Companies (the “Allocated Companies”) (e.g., legal expenses for a transaction in which all such Companies participate). On such occasions, each Allocated Company will reimburse the Payor Company for its share of such expense, without interest, promptly after the payment is made by the Payor Company. While highly unlikely, it is possible that an Allocated Company could default on its obligation to reimburse the Payor Company. With respect to allocating other expenses among Companies, co-investment vehicles, Investors and/or third parties, as appropriate, to the extent not addressed in the Offering Documents of a Company,GPB will make any such allocation determination in a fair and reasonable manner using its good faith judgment, notwithstanding its interest (if any) in the allocation. GPB will make any corrective allocations and take any mitigating steps if it determines such corrections are necessary or advisable.

In addition, GPB, the Companies, the Holding Companies, or their Portfolio Companies will from time-to-time retain and compensate companies and individuals (“Operations Support Providers”), which include affiliates and employees of GPB, and third party consultants and advisors. The Operations Support Providers provide operational support and consulting services and similar services to, or in connection with, the identification, acquisition, holding and improvement of such Portfolio Companies or Holding Companies (“Operations Support Services”). These services may be high level insight or extensive day-to-day roles, and may include support to GPB, Holding Companies or Portfolio Companies regarding, among other things, the company’s management and operations (including serving in management positions or participating in determining corporate strategy), a Portfolio Company’s or Holding Company’ssales/marketing strategy and retail strategy, data intelligence, finance (including generating metrics and reporting and business restructuring), human capital management (including recruiting personnel and determining executive/incentive compensation), information technology, corporate communications, customer service, sustainability, real estate matters and similar operational matters. The nature of the


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relationship with each such Operations Support Provider and the time devotion requirements of each such Operations Support Provider may vary significantly.

Fees and expenses associated with Operations Support Services (“Operations Expenses”) are generally paid and/or reimbursed by the Companies but may be paid or reimbursed by the relevant Portfolio Company or Holding Company. Operations Expenses (including Operations Expenses incurred in connection with an affiliated Operations Support Provider, including GPB employees) will be determined at the discretion of GPB taking into account the particular Operations Support Services, and may include an annual fee or retainer, a discretionary bonus, a profits or equity interest in a Portfolio Company or Holding Company or other incentive-based compensation to the Operations Support Provider as well as any expenses incurred with respect to recruiting and hiring Operations Support Providers. Operations Expenses will include the compensation of certain GPB employees relating to the time such employees provide Operations Support Services. The determination of whether a service is an Operations Support Service will be made by GPB, in its sole discretion. Operations Expenses will, from time to time, also be incurred in respect of Portfolio Companies prior to the closing of the investment. In the event that one or more Operations Support Providers (directly or indirectly) is providing services with respect to multiple Companies, such Operations Expenses will be allocated among the Companies as determined by GPB, as applicable in a fair and equitable manner. To the extent any such Operations Expenses are payable to any Operations Support Provider that is affiliated with or employed by GPB, such Operations Expenses will not reduce any fees otherwise payable to GPB. These payments or reimbursements are in addition to, and not in lieu of, the managerial assistance fee. GPB’s determination as to whether a service is an Operations Support Service, the categorization of any fees and expenses (e.g., as Operations Expenses) and the allocation of such fees and expenses shall be binding on the Companies and Investors.

As distinguished from certain of our competitors who may allocate Operations Expenses at the Portfolio Company level, but may have less direct oversight, GPB believes that it is able to maintain a higher degree of operating control over its Portfolio Companies’ operations and finances by employing many of these individuals itself (in lieu of having these individuals employed by the Portfolio Companies or by having independent third parties serve in these roles). It is GPB’s view that the benefits of this structure far outweigh the costs borne by the Companies and, indirectly, the Investors. Given the income-oriented nature of our Portfolio Companies, and our desire to pay a monthly distribution to our limited partners, GPB believes that this type of oversight of our Portfolio Companies is critical to our long-term success. Allocating a portion of GPB’s internal expenses incurred on the Companies’ behalf presents a conflict of interest, as discussed below in Item 11.

Potential Investors must review the Offering Documents carefully for a discussion of the actual fees and expenses applicable to their investment.

Upon termination of the Offering Documents, managerial assistance fees that have been prepaid may be returned on a prorated basis.

Item 6: Performance-Based Fees and Side-by-Side Management

With respect to each Company, a portion of the profits of each such Company are distributed to the certain affiliates of GPB, including certain officers, employees and directors of Ascendant, as “carried interest” (the “Carried Interest”). GPB affiliates’ indirect receipt of Carried Interest is intended to align GPB affiliates’ interests with those of the Companies. The nature of the Carried Interest, however, creates a potential conflict of interest among GPB, its affiliates, its associated persons, Ascendant, and the Companies.


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Carried Interest paid by Companies usually equals 20% of distributions made by a Company after certain return thresholds or hurdles are met.

Depending on a Company’s Offering Documents, GPB, in its sole discretion, may agree to a different fee structure for certain Investors, which may include employees of GPB, their relatives and certain other Investors.

The payment by some, but not all, Companies of Carried Interest or the payment of Carried Interest at varying rates (including varying effective rates based on the past performance of a Company) may create an incentive for GPB to disproportionately allocate time, services or functions to Companies paying Carried Interest or Companies paying Carried Interest at a higher rate, or allocate investment opportunities to such Companies. See “Allocation of Investment Opportunities” in Item 8 below and refer to GPB’s “Allocation Policy” for additional information on how these conflicts are addressed.

Fees and Carried Interest may differ between the Companies and each Investor must review the relevant Company’s Offering Documents carefully for a list of the actual Carried Interest, fees and expenses payable by such Company.

Item 7: Types of Clients

Currently, GPB’s only clients are the Companies. The minimum investment by an Investor in a Company is set out in the relevant Company’s Offering Documents.

Item 8: Methods of Analysis, Investment Strategies, and Risk of Loss

A. Methods of Analysis and Investment Strategies

For a discussion of the investment strategies and methods of analysis employed by GPB on behalf of the Companies, please refer to Item 4 above and the Offering Documents of each Company.

B. Risks

Each Company has its own specific risks, but the following are risks that are generally associated with the types of investments the Companies may make. The list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in a Company investment. Each Investor and prospective Investor must review the relevant Company’s Offering Documents carefully for a comprehensive list of a Company’s risks and conflicts.

Investing in the Companies involves a risk of loss that Investors should be prepared to bear.

General Risks

High Expense Ratio. The Companies will be obligated to pay fees, and substantial administrative, travel, accounting, tax and legal expenses and certain salaries of employees of GPB regardless of whether the Companies realize revenues. Any use of leverage will increase these fees and charges, and the Companies will need to make substantial profits to avoid depletion of their assets and provide a return to Investors.

Competition. The Companies expect to encounter intense competition from other entities making similar acquisitions or investments, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive


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experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than the Companies do, and the Companies’ financial resources will be relatively limited when contrasted with those of many of these competitors. While GPB believes that there are numerous potential Portfolio Companies that the Companies could acquire with the net proceeds of an offering, the Companies’ ability to compete in acquiring certain sizable target businesses will be limited by their available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Any of the foregoing may place the Companies at a competitive disadvantage in successfully negotiating an acquisition.

Portfolio Company Competition Risks. The Companies expect that their Portfolio Companies will compete with other companies in their respective businesses. The Companies expect to focus on industries that are rapidly evolving and may become more competitive. While the Companies believe acquisitions in these areas offer the opportunity for current yield through strong cash flows that may increase over time, such acquisitions also involve a high degree of risk. As is typical in rapidly evolving industries, demand and market acceptance for new products and services are subject to a high degree of uncertainty. In addition, while many companies in these sectors have grown or have the potential to grow, there is no guarantee of the same in the future. Portfolio Companies may have histories of net losses and may continue to have net losses for years after acquisition by a Company. There can be no assurance that the Companies will be able to make acquisitions on attractive terms or operate Operating Companies profitably. To the extent the Companies consummate acquisitions, they may be affected by numerous risks inherent in the businesses acquired. For example, if the Companies purchase a financially unstable business or an entity lacking an established record of sales or earnings, the Companies will be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although GPB endeavors to evaluate the risks inherent in a particular target business, the Companies cannot assure Investors that GPB will properly ascertain or assess all of the significant risk factors or that the Companies will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of the Companies’ control and leave the Companies with no ability to control or reduce the chances that those risks will adversely impact a Portfolio Company.

Litigation Risks. The Companies and Portfolio Companies will be subject to a variety of litigation risks. Under most circumstances, the Companies will indemnify GPB, its principals and representatives for any costs they may incur in connection with such disputes. The officers, directors and representatives of the Portfolio Companies (which will include Company personnel or persons affiliated with GPB) will be similarly indemnified by such entities. Beyond direct costs, such disputes may adversely affect the Companies or their Portfolio Companies in a variety of ways, including by distracting GPB and / or the officers, directors and representatives of such entities and harming relationships between such entities and the Portfolio Companies as well as active or potential Investors, other potential sources of capital, and other entities important to the success of the Portfolio Companies. In connection with the disposition of a Portfolio Company, the Companies may be required to make representations about the business and financial affairs of the Portfolio Company typical of those made in connection with the sale of any business, and may be responsible for the content of disclosure documents under applicable securities laws. These arrangements may result in the contingent liabilities, for which GPB may establish reserves and escrows. In that regard, distributions may be delayed or withheld until such reserve is no longer needed or the escrow period expires. Such liabilities might ultimately have to be funded by Investors to the extent that the Investors have received prior distributions from the Companies.

General Investment Risks

General Acquisition Risks. The Companies’ success depends on GPB’s ability to implement its acquisition and operational strategy for the Companies. Any factor that would make it more difficult to execute timely


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acquisitions, such as a significant reduction of liquidity in a particular market, or any factor that negatively affects the operational profitability of the Portfolio Companies, may also be detrimental to profitability. No assurance can be given that the Companies’ strategies will be successful under all or any market conditions.

No Assurance of Distributions. The process of identifying, screening and successfully acquiring and operating private companies is difficult and risky. The Companies can provide no assurances that they will be able to generate operating cash flow sufficient to make distributions to Investors. Thus, there is no guarantee that the Companies will pay any particular amount of distributions, if at all. Furthermore, while the Companies have no present plans to do so, the Companies could include Investors’ invested capital in amounts distributed to Investors, which may reduce the amount of capital available to acquire and operate Portfolio Companies and make other permitted acquisitions as well as negatively impact the value of Investors’ investments, especially if a substantial portion of the Companies’ distributions are paid from Investors’ invested capital.

Risks Associated with Portfolio Companies. Identifying and participating in attractive acquisition opportunities and assisting in the building of successful enterprises are difficult tasks. There is no assurance that the Companies or any particular Portfolio Company will be profitable and there is a substantial risk that any particular Portfolio Company’s losses and expenses will exceed their income and gains. Any return on investment to the Investors will depend upon the Companies’ successful acquisition and the Companies’ ability to generate cash flows from the operation of the Portfolio Companies. There generally will be little or no publicly-available information regarding the status and prospects of the Portfolio Companies. Many acquisition decisions by GPB will be dependent upon its ability to obtain relevant information, and GPB often will be required to make decisions without complete information or in reliance upon information provided by third parties that is impossible or impracticable to verify. The value of each Portfolio Company will depend upon many factors beyond the Companies’ control. Portfolio Companies may have substantial variations in results from period to period; face intense competition, and experience failures or substantial declines in value at any stage. Portfolio Companies may need substantial additional equity or debt capital to support growth or to achieve or maintain a competitive position. Such capital may not be available on attractive terms, or may not be available at all. The Companies’ capital is limited and may not be adequate to protect the Companies from dilution in multiple rounds of financing in connection with acquisition or operation of Portfolio Companies.

Acquisition Strategy Risks. Like any strategy, there are risks associated with the Companies’ target sectors. Thus, there is a need to constantly evaluate such risks and develop clear strategies that measure and manage these risks. There are risks that operators who may not be able to run the business both from a personal and business point of view. The aggregation model poses litigation risk. Litigation costs are substantial and could potentially impact a Portfolio Company. There is also a cultural integration risk. In the services business, people are critical to success. Cultural integration issues could pose risks to the overall consolidated company.

Failure of a Portfolio Company. Portfolio Companies may fail. Some Companies expect to focus on the acquisition and operation of Portfolio Companies in the automotive retail, managed IT services, and other sectors, and it is possible that those segments could suffer more so than other segments. There are no legal requirements as to concentration or diversification imposed on the Companies with respect to the allocation of assets among those or other sectors, such as are imposed on registered investment companies. No assurance can be given that the failure of one or more Portfolio Companies will not have a material adverse effect on the Companies.

Lack of Publicly Available Information Regarding Acquisitions. The interests in the Portfolio Companies will not be offered under registration statements under the 1933 Act. In addition, Portfolio Companies will not be subject to the periodic information and reporting provisions of the 1934 Act. Accordingly, publicly-


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available information about Portfolio Companies may be limited. The Companies will be required to rely on the ability of GPB to obtain adequate information to evaluate the potential operational returns from acquiring these companies. If GPB is unable to uncover all material information about Portfolio Companies, it may not make a fully informed acquisition decision, and the Companies may lose some or all capital on such acquisitions.

Risks Related to Acquiring and Operating Portfolio Companies. The Companies expect to acquire and operate companies with smaller market capitalizations. Acquisitions of small- and medium-capitalization companies involve significantly greater risks than acquisitions of larger, better-known companies. There is ordinarily a more limited marketplace for the purchase of interests in smaller, private companies, which may make it difficult to source acquisitions. In addition, the relative illiquidity of interests in privately-held companies generally, and the somewhat greater illiquidity of interests in small- and medium-sized privately-held companies, could make it difficult for the Companies to react to negative economic or political developments. Accordingly, Investors should have a long-term investment horizon.

Illiquid Holdings and Difficulty of Valuation. The Companies plan to acquire and operate private companies for which no (or only a limited) liquid market exists or that are subject to legal or other restrictions on transfer. While Portfolio Companies will be acquired and operated for the purpose of generating income from operations and will be held indefinitely, the Companies may consider strategic transactions on an opportunistic basis, such as an initial public offering, spin-off of businesses, or sale of a Portfolio Company or a business line. Even if the Companies were required to sell Portfolio Companies, the Companies could be unable to sell assets or to realize what Companies perceive to be their fair value in the event of a sale. In addition, any sale of a Portfolio Company or the Companies’ interests therein could take a significant period of time to sell due to market conditions, availability of financing, lack of demand and other conditions. Because there will be no readily available market for the Portfolio Companies, those Portfolio Companies cannot be sold quickly and will be difficult to value. Determination of fair values for such companies involves judgments that are not susceptible to substantiation by auditing procedures. Values assigned to Portfolio Companies may not accurately reflect values that may be actually realized if the Companies seek to dispose of them. Accordingly, Investors should expect to hold their investments in the Companies for the long-term and realize their returns from cash flows from operations.

Risk Inherent In Portfolio Company Acquisitions. Acquisitions of private companies involve a high degree of risk, including that private companies:

may have limited financial resources and may require substantial amounts of financing that maynot be available;typically have shorter operating histories, narrower product lines and smaller market shares thanlarger businesses, which tend to render them more vulnerable to competitors’ actions and marketconditions, as well as general economic downturns;are more likely to depend on the management talents and efforts of a small group of persons;therefore, the death, disability, resignation or termination of one or more of these persons couldhave a material adverse impact on a Portfolio Company and, in turn, on the Companies;generally have less predictable operating results, may from time to time be parties to litigation, maybe engaged in rapidly changing businesses with products subject to a substantial risk ofobsolescence, and may require substantial additional capital to support their operations, financeexpansion or maintain their competitive position;may be particularly susceptible to economic slowdowns or recessions and may be unable to repaytheir loans or meet other obligations during these periods; andoften experience unexpected problems in the areas of product development, manufacturing,marketing, financing, and general management, which, in some cases, cannot be adequately solved.


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There can be no assurance of the success of such enterprises.

Follow-on Funding Requirements. Following the Companies’ initial acquisition of a Portfolio Company, the Companies may be required to make additional capital contributions to the Portfolio Company. Such additional contributions may be necessary to protect the Companies’ interest in Portfolio Companies that require additional financing to carry out their business plans. There is no assurance that the Companies will make such additional contributions or that they will have the ability to do so. The failure to make additional contributions may impact the Companies’ ability to realize a meaningful return and may impact the recovery of the Companies’ contribution.

Financing for Acquisitions. The Companies cannot ascertain the capital requirements for all of their potential acquisitions. If the net proceeds of an offering prove to be insufficient, either because of the size of the acquisition, the depletion of the available net proceeds in search of a target business, expenses incurred by the Companies or other reasons, the Companies will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate a particular acquisition, the Companies would be compelled to either restructure the transaction or abandon that particular acquisition and seek an alternative target business candidate. In addition, if the Companies consummate an acquisition, they may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the Portfolio Companies. GPB and its affiliates are not required to provide any financing in connection with or after an acquisition. If a Portfolio Company is unable to generate sufficient cash flow to meet its obligations, including any debt service obligations for financing, the Portfolio Company may default under its loan obligations, be required to sell assets, obtain additional financing, or alternatively, liquidate, which could have a material adverse effect on the Companies’ revenue, asset value and ability to pay distributions. If the Companies guarantee any such indebtedness, the Companies could be required to sell assets or obtain additional financing to repay any guaranteed amounts, which could have a material adverse effect on the Companies’ revenue, asset value and ability to pay distributions.

Regulation under the Investment Company Act of 1940. The Companies intend to conduct their operations so that they will either (i) qualify for an applicable exemption from registrations, or (ii) not meet the definition of an “investment company” under the Investment Company Act of 1940, as amended (the “1940Act”) and are not required to register under the 1940 Act. Section 3(a)(1)(A) of the 1940 Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the 1940 Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer's total assets, exclusive of government securities and cash items (the “40% test”). Excluded from the term “investment securities,” among other things, are securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act. The 1940 Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person.

If the 40% test is not satisfied, an issuer still would not be considered an “investment company” under Rule 3a-1 (the “45% test”), if no more than 45% of the value of its total assets, exclusive of government securities and cash items, consists of, and no more than 45% of its unconsolidated net income after tax for the last four fiscal quarters (95% or more owned subsidiaries may be consolidated) is derived from, securities other than government securities and securities of certain majority-owned subsidiaries and primarily controlled


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companies. A company is controlled primarily if the issuer has control over the company and the degree of the issuer’s control is greater than that of any other person.

The Companies intend to conduct their operations so that a sufficient portion of their acquisitions are either majority-owned subsidiaries and or companies that the Companies primarily control, so that the Companies qualify for either the 40% test or the 45% test. The determination as to whether the Companies meet these tests depends on a factual analysis of whether the Companies’ holdings qualify as majority ownership and whether the Companies control primarily an entity. There is only limited authority interpreting the treatment of entities as either majority owned or controlled primarily. The Companies have not asked the SEC staff for concurrence of this analysis and it is possible that the SEC staff could disagree with any of these determinations. If the SEC staff were to disagree with the Companies’ treatment of one or more companies as majority-owned subsidiaries, the Companies would need to adjust their strategy and assets. Any such adjustment in the Companies’ strategy could have a material adverse effect on the Companies.

It is possible that during the ramp-up period a Company may not qualify under either the 40% test or the 45% test. In such case, the Company would intend to rely on either (i) another applicable exemption from registration under the 1940 Act or (ii) Rule 3a-2 under the 1940 Act, which allows a company that otherwise would be an investment company (as a “transient investment company”) a grace period of one year from the date of classification, to avoid registration under the Investment Company Act so long as it does not intend to engage primarily in the business of investing, reinvesting, owning, holding or trading in securities. The Company would then intend to acquire assets in the future so that it would meet one of these tests upon or prior to the expiration of the “transient investment company” grace period.

Even if the Companies meet the 40% test or the 45% test, a Company could be deemed to be an “investment company” under the 1940 Act if that Company is considered to be a “special situation investment company.” The SEC has stated that an issuer is a special situation investment company if it engages in the operation of other companies for the primary purpose of making a profit in the sale of securities of such companies. GPB believes that the Companies would not be treated as special situation investment companies, because the Companies are acquiring interests in Portfolio Companies to hold for the long-term and the primary purpose is to generate operating cash flow and not to make a profit from the sale of the Companies’ interests in Portfolio Companies. There is only limited authority on what constitutes a special situation investment company and there can be no assurance that the SEC staff would agree with this determination.

Qualification for exemption from registration, and or for an exception from the definition of an investment company, may limit the Companies’ ability to make certain acquisitions. To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon such exclusions, the Companies’ may be required to adjust their strategies accordingly. Any additional guidance from the SEC staff could provide additional flexibility to the Companies, or it could further inhibit the Companies’ ability to pursue the strategies chosen.

The loss of a Company’s exclusion from regulation and/or exemption from registration, pursuant to the 1940 Act could require that Company to restructure its operations, sell certain assets or abstain from the purchase of certain assets, which could have an adverse effect on the Company’s financial condition and results of operations.

Registration under the 1940 Act would require a Company to comply with a variety of substantive requirements that impose, among other things, limitations on capital structure, restrictions on specified investments, restrictions on borrowings and other leverage and prohibitions on transactions with affiliates. Additionally, if a Company were required to register as an “investment company” but failed to do so, that


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Company could be prohibited from engaging in its business, and criminal and civil actions could be brought against it.

Systems Risks. The Companies depend on GPB to develop and implement appropriate systems for their activities. The ability of the Companies’ systems to accommodate increasing volume could also constrain the Companies’ ability to manage their portfolios. In addition, certain of GPB’s operations may interface with or depend on systems operated by third parties, and there may be inadequate means to verify the risks or reliability of such third party systems. These programs or systems may be subject to certain defects, failures or interruptions, including those caused by worms, viruses and power failures. Any such defect or failure could have a material adverse effect on the Companies. Although GPB endeavors to provide sufficient redundancy and back-up for material information related to the Companies, GPB is not liable to the Companies for losses caused by systems failures.

Inadequate Capital. The Companies intend to acquire companies and operate them for the long-term. Operating cash flow, if any, generated from acquisitions may not be sufficient to cover operating expenses. If for any reason a Company’s operating reserves are insufficient to fund expenses of the Fund or of its Portfolio Companies, the Company or such Portfolio Companies may seek debt financing, which would accrue interest and would be payable prior to any distributions to equity holders. Such sources or other sources of funding may not be available or may not be available under terms that are acceptable. Any additional financing could ultimately dilute an Investor’s interest in a Company.

Changes in Environment. The Companies’ acquisition and operational program is intended to extend over an indefinite period of time during which the business, economic, political, regulatory, and technology environment within which the Companies will operate Portfolio Companies may undergo substantial changes, some of which may be adverse to the Companies. GPB, on the Companies’ behalf, will have the exclusive right and authority to determine the manner in which the Companies respond to such changes, and Investors generally will have no right to withdraw from the Companies or to demand specific modifications to the Companies’ operations in consequence thereof.

Leverage. The Companies’ acquisitions, directly or indirectly, may be leveraged acquisitions. Utilization of leverage is a speculative technique and involves risks to Investors. While leverage may enhance total returns to Investors, if operating cash flows fail to cover borrowing costs, then returns to Investors will be lower than if there had been no borrowings. To the extent the Companies utilize leverage in an acquisition, the acquisition will be subject to increased exposure to adverse economic factors such as a significant rise in interest rates, a severe downturn in the economy or deterioration in the condition of such acquisition. In the event of a Company’s dissolution, lenders and holders of its debt securities would receive a distribution of its available assets before distributions to Investors in the Company. Any new units of limited partnership interest may have a preference over the older interests with respect to distributions and upon dissolution, which could further limit the Company’s ability to make distributions to Investors. Because a Company’s decision to incur debt and issue shares in any future offerings will depend on market conditions and other factors beyond the Company’s control, the Company cannot predict or estimate the amount, timing or nature of future offerings or the Company’s future debt and equity financings. Further, market conditions could require the Company to accept less favorable terms for the issuance of its securities in the future, including issuing limited partnership interests at a discount to market value. Accordingly, Investors will bear the risk of future offerings reducing the value of their interests, diluting their interest in the Company.

Undisclosed Acquisition and Operation Strategy. Acquisition and operations strategies and techniques employed to attempt to reach the Companies’ goals are proprietary and may not be disclosed to potential Investors (or to Investors). As a result, a potential Investor’s decision to invest in a Company must be made without the benefit of being able to review and analyze the Company’s strategies and techniques in their entirety.


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Preference of Certain Fees Regardless of Profitability. Certain entities and persons referenced in the Offering Documents are entitled to receive the various fees described herein regardless of whether the Companies or any Portfolio Companies operate at a profit. To the extent that Portfolio Companies are not generating sufficient revenue to pay the fees, the Companies may have to pay these fees out of other available cash, thus further reducing the amount of cash available for distribution to Investors or to pay other expenses. Similarly, Portfolio Companies may be required to pay certain fees or revenue to GPB and/or its respective affiliates, officers, directors, employees, agents and equity-holders, including Ascendant (collectively, the “Related Parties”) for services outlined in this Brochure whether or not the Portfolio Companies are operating at a profit.

Risks of Senior Debt. Making senior secured loans to private North American companies, including middle-market companies, may be risky. There is a risk that any collateral pledged by Portfolio Companies in which the Companies have taken a security interest may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the Portfolio Company to raise additional capital. To the extent a Company’s debt is collateralized by the securities of a Portfolio Company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency. Also, in some circumstances, a Company’s security interest may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a Portfolio Company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the debt. Secured debt that is under-collateralized involves a greater risk of loss. The fact that debt is secured does not guarantee that the Company will receive principal and interest payments according to the debt’s terms, or at all, or that the Company will be able to collect on the debt should the Company be forced to enforce its remedies.

Other Senior Debt of Portfolio Companies. Portfolio Companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which the Companies invest. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which the Companies are entitled to receive payments with respect to the debt instruments in which the Companies invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a Portfolio Company, holders of debt instruments ranking senior to a Company’s debt strategies in that Portfolio Company would typically be entitled to receive payment in full before a Company receives any proceeds. After repaying such senior creditors, such Portfolio Company may not have any remaining assets to use for repaying its obligation to the Companies. In the case of debt ranking equally with debt instruments in which the Companies invest, the Companies would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant Portfolio Company.

Debt Assets Subordinated to Claims of Other Creditors or Lender Liability Claims. If one of the Portfolio Companies were to go bankrupt, depending on the facts and circumstances, including the extent to which the Companies provided managerial assistance to that Portfolio Company, a bankruptcy court might recharacterize a Company’s debt assets and subordinate all or a portion of the Company’s claim to that of other creditors. In situations where a bankruptcy carries a high degree of political significance, a Company’s legal rights may be subordinated to other creditors. The Companies may also be subject to lender liability claims for actions taken by the Companies with respect to a borrower’s business or in instances where the Companies exercise control over the borrower or render significant managerial assistance.

Control of Portfolio Companies. While the Companies intend to acquire majority and / or primary control interests in Portfolio Companies, the Companies may not have control to act on all matters without the


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consent of other investors in these companies. The Companies also may not control Portfolio Companies for which the Companies act as lender, even though the Companies may have board representation or board observation rights, and the Companies’ debt agreements with such Portfolio Companies may contain certain restrictive covenants. As a result, the Companies are subject to the risk that a Portfolio Company in which they invest may make business decisions with which the Companies disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve the Companies’ interests as debt investors. Due to the lack of liquidity, the Companies may not be able to dispose of their interests in certain Portfolio Companies as readily as the Companies would like or at an appropriate valuation. As a result, a Portfolio Company may make decisions that could decrease the value of the Companies’ portfolio holdings.

Risks Associated with Changes in Interest Rates. To the extent the Companies make loans, the Companies will be subject to financial market risks, including changes in interest rates. General interest rate fluctuations may have a substantial negative impact on the Companies’ debt investments and lending opportunities and, accordingly, have a material adverse effect on the Companies’ objectives and the return realized by Investors. In addition, an increase in interest rates would make it more expensive to use debt for the Companies’ financing needs, if any.

Interest rates have recently been at or near historic lows. In the event of a rising interest rate environment, payments under floating rate debt instruments generally would rise and there may be a significant number of issuers of such floating rate debt instruments that would be unable or unwilling to pay such increased interest costs and may otherwise be unable to repay their loans. Debt investments with a floating rate may also decline in value in response to rising interest rates if the interest rates of such debt investments do not rise as much, or as quickly, as market interest rates in general. Similarly, during periods of rising interest rates, fixed rate debt investments may decline in value because the fixed rates of interest paid thereunder may be below market interest rates.

Future Economic Recessions or Downturns. Many of the Companies’ potential Portfolio Companies may be susceptible to economic slowdowns or recessions (such as the economic downturn that occurred from 2008 through 2009) and may be unable to repay the Companies’ loans during these periods. Therefore, the Companies’ non-performing assets are likely to increase, and the value of the Companies’ portfolio is likely to decrease, during these periods. Adverse economic conditions may also decrease the value of any collateral securing the Companies’ debt investments. A prolonged recession may further decrease the value of such collateral and result in losses of value in the Companies’ portfolio and a decrease in revenues, net income and asset value. Unfavorable economic conditions also could increase the Companies’ funding costs, limit the Companies’ access to the capital markets or result in a decision by lenders not to extend credit to the Companies on terms deemed acceptable by the Companies. These events could prevent the Companies from increasing the number of loans the Companies can make and harm the Companies’ operating results. Economic downturns or recessions may also result in a Portfolio Company’s failure to satisfy financial or operating covenants imposed by the Companies or other lenders, which could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its assets representing collateral for its obligations, which could trigger cross defaults under other agreements and jeopardize the Portfolio Company’s ability to meet its obligations under the debt that the Companies hold and the value of any equity securities the Companies own. The Companies may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting Portfolio Company.

Leverage of Portfolio Companies. Some potential Portfolio Companies may be highly leveraged, which may have adverse consequences to these companies and to a Company as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business


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opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

Management Risks

Reliance on Individual Members of GPB & its Affiliates. The Companies are particularly dependent upon the efforts, experience, contacts and skills of the individual members of GPB, and its acquisition committee, composed of up to six members who are nominated, appointed and removed by GPB (the “Acquisition Committee”) and certain of their affiliates and principals. The loss of any such individual could have a material, adverse effect on the Companies, and such loss could occur at any time due to death, disability, resignation or other reasons. In some cases the Companies may insure the lives of principals deemed important to the Companies’ success. There can be no assurance that the individual employees and advisors to GPB will continue to be employed by GPB or that such employees and advisors will continue to function on the Companies’ behalf. If the services of certain key employees of GPB become unavailable, GPB would need to recruit qualified personnel, which may prove difficult.

Evaluation of Acquisitions. Investors will not be permitted to evaluate Portfolio Company opportunities or relevant business, economic, financial or other information that will be used by GPB in making acquisition decisions. Except as specifically provided in the relevant Company’s Offering Documents, GPB will have the exclusive right and power to manage each Company’s business and affairs.

Changes in Acquisition Strategies. GPB has broad discretion to expand, revise or contract a Company’s business without the consent of the Investors. A Company’s acquisition strategies may be altered, without prior approval by, or notice to, the Investors, if GPB determines that such change is in the Company’s best interest.

Due Diligence. Even if GPB conducts extensive due diligence on a target business, the Companies cannot assure Investors that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of the Companies’ control will not later arise. As a result of these factors, the Companies may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if GPB’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with preliminary risk analyses. The Companies expect that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a Company decides not to complete a specific acquisition, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if the Companies reach an agreement relating to a specific target business, the Companies may fail to consummate the transaction for any number of reasons including those beyond their control. Any such event will result in a loss to the Companies of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire another business.

Cybersecurity Risk. GPB, the Companies’ service providers and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect the Companies and their investors, despite the efforts of GPB and the Companies’ service providers to adopt technologies, processes and practices intended to mitigate these risks and protect the security of their computer systems, software, networks and other technology assets, as well as the confidentiality, integrity and availability of information belonging to the Companies and its Investors. For example, unauthorized third parties may attempt to improperly access, modify, disrupt the operations of, or prevent access to these systems of GPB,


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the Companies’ service providers, counterparties or data within these systems. Third parties may also attempt to fraudulently induce employees, customers, third-party service providers or other users of GPB’s systems to disclose sensitive information in order to gain access to GPB’s data or that of the Companies’Investors. A successful penetration or circumvention of the security of GPB’s systems could result in the loss or theft of an investor’s data or funds, the inability to access electronic systems, loss or theft of proprietary information or corporate data, physical damage to a computer or network system or costs associated with system repairs. Such incidents could cause the Companies, GPB or their service providers to incur regulatory penalties, reputational damage, additional compliance costs or financial loss.

Similar types of operational and technology risks are also present for the companies in which the Companies invest, which could have material adverse consequences for such companies, and may cause the Companies’ investments to lose value.

Conflicts of Interest.

The Related Parties engage in a broad range of activities in connection with the Companies’ activities and acquisitions and may therefore have potential or actual conflicts of interest in connection with such activities and acquisitions. In the ordinary course of conducting its activities, the interests of a Company will from time to time conflict with the interests of GPB, the other Companies, or their respective affiliates. Certain of these conflicts of interest, as well a description of how GPB addresses such conflicts of interest, can be found below.

Management Responsibilities. GPB manages a number of Companies that have investment objectives similar to each other. GPB expects that it or its personnel will in the future establish one or more additional companies with investment objectives substantially similar to, or different from, those of the current Companies. Allocation of available investment opportunities between the Companies and any such companies could give rise to conflicts of interest. See “Allocation of Investment Opportunities” below. In addition, it is expected that employees of GPB responsible for managing a particular Company will have responsibilities with respect to other Companies managed by GPB, including companies raised in the future or to proprietary investments made by GPB and/or its principals of the type made by a Company. Conflicts of interest arise in allocating time, services or functions of these officers and employees.

In addition, Related Parties serve as officers, directors, accountants, advisors to or managers of Portfolio Companies or other companies (and receive fees or other compensation at market rates from such Portfolio Companies in connection therewith for services which would have otherwise been outsourced). Such other entities, clients or accounts may have objectives or may implement strategies similar to the Companies’.

GPB typically places certain restrictions on a Company entering into a transaction in which GPB would acquire or sell an asset in which a Related Party has a financial interest. Nevertheless, GPB, its affiliates, and members, officers, principals and employees of GPB and its affiliates may buy or sell securities or other instruments that GPB has recommended to the Companies. Officers, principals and employees of GPB may also buy securities in transactions offered to but rejected by the Companies. A conflict of interest may arise because such investing GPB personnel will, for some investments, benefit from the evaluation, investigation, and due diligence undertaken by GPB on behalf of the Company. In such circumstances, the investing GPB personnel will not share or reimburse the relevant Companies and/or GPB for any expenses incurred in connection with the investment opportunity. In addition, officers and employees may also buy securities in other investment vehicles (including private equity funds, hedge funds, real estate funds and other similar investment vehicles) which may include potential competitors of the Companies. The transactions described above are subject to the policies and procedures set forth in GPB’s Code of Ethics. The investment policies, fee arrangements and other circumstances of these investments may vary from


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those of the Companies. If officers, principals and employees of GPB have made large capital investments in or alongside the Companies they will have conflicting interests with respect to these investments.

Allocation of Investment Opportunities. The strategies of the Companies from time to time overlap with each other. If a potential Portfolio Company acquisition fits the acquisition objective of more than one Company, the Acquisition Committee will allocate opportunities in good faith and on a basis believed to be fair and equitable, and no Company shall receive preferential treatment over another. In order to ensure all Portfolio Company acquisitions are allocated fairly, the Acquisition Committee will consider the Company’s specific circumstances and adhere to GPB’s “Allocation Policy.”

Limited Access to Information. Although GPB generally provides access to material and substantive information concerning the Companies, the rights of Investors to information regarding the Companies and their Portfolio Companies will be limited—even if the interests are registered under the 1934 Act and the Companies publicly report thereunder. In particular, GPB will likely obtain certain types of material information that will not be disclosed to Investors. For example, GPB may obtain information regarding Portfolio Companies that is material to determining the value of such assets. Such information may be withheld from Investors in order to comply with duties or otherwise to protect the interests of other parties or the Companies.

Decisions by GPB to withhold information may have adverse consequences for Investors in a variety of circumstances. For example, an Investor that seeks to sell his / her interests may have difficulty in determining an appropriate price for such interests. Even though the Companies have been structured to align the interests of GPB and the Investors, decisions to withhold information may also make it difficult for Investors to subject GPB to rigorous oversight.

Inter-Company Loans. The Companies, either alone or along with one or more entities managed by or otherwise affiliated with GPB, may engage in the lending or borrowing of capital to or from an entity managed or otherwise affiliated with GPB. For further discussion on such inter-company loan transactions and the parameters set forth in GPB’s Inter-Company Loan Policy, see below, as well as each Company’s Offering Documents.

GPB may have conflicts of interest in determining to which entity a particular business opportunity should be presented, though GPB will attempt to equitably allocate acquisition opportunities between Companies. As discussed above, the Companies, either alone or along with one or more entities managed by or otherwise affiliated with GPB, may engage in the lending or borrowing of capital to or from an entity managed or otherwise affiliated with GPB (“Inter-Company Loans”). Such Inter-Company Loan transactions must adhere to certain parameters set forth in GPB’s Inter-Company Loan Policy. The Companies require the review and approval of an advisory committee (composed of at least three members who are appointed by GPB, but must be independent of GPB, the Companies and their respective affiliates, in a manner proscribed for companies listed on the New York Stock Exchange) and Acquisition Committee for all prospective Inter-Company Loan transactions.

Inter-Company Loan transactions may occur for a variety of reasons. Supervised persons of GPB may be invested in the Companies and therefore have an indirect interest in securities held by the Companies and involved in these Inter-Company Loan transactions. In certain cases, GPB may determine that it is also appropriate for more than one Company to co-invest in a Portfolio Company. GPB or its affiliates may organize other GPB entities that may wish to acquire interests in companies in the same target sectors the Companies are pursuing, and the other GPB entities may wish to joint venture with the Companies. If a potential Portfolio Company acquisition fits a Company’s objective and one or more other GPB entities, and each have capital available to acquire interests in the Portfolio Company, GPB will allocate the


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opportunity among the Companies and the other GPB entities taking into account all relevant factors, including:

• The amount of capital each participant has available, as compared to the total amount of capital each participant anticipates raising;

• The extent to which the potential Portfolio Company deviates from the participants’ acquisition objectives; and

• The extent to which the potential acquisition would promote the participants’ sector, geographic, brand or other diversification goals.

Should the Acquisition Committee recommend a transaction in which more than one GPB sponsored entities joint venture, GPB will not:

• Disadvantage one GPB sponsored entity over another GPB sponsored entity; • Pursue the transaction unless each company has the right to participate on the same terms,

including the ability of a company to acquire additional interests; • Recommend one company participate in the joint venture as a method to increase fees from

that or another GPB sponsored entity; • Pursue such transactions as a method to transfer risk from one GPB sponsored entity to another

GPB sponsored entity; and • Bring an additional GPB sponsored entity into the transaction for the purpose of reducing

another GPB sponsored entity’s transactional costs.

The members and/or partners and principals and affiliates of GPB affiliates may have conflicts of interest in allocating their time and activity between the Companies and other clients, in allocating investments among Companies and other clients, and in effecting transactions for the Companies and other clients, including ones in which a Company may have a greater financial interest.

Inter-Company Guarantees. In connection with seeking financing or refinancing for Portfolio Companies and their assets, it may be the case that better financing terms are available when more than one Portfolio Company or other related entity provides collateral or guarantees the financing, particularly in circumstances where the assets of each Portfolio Company or related entity are similar in nature. As such, rather than seeking such financing or refinancing on their own, Portfolio Companies of the Company, or portfolio companies of other Companies managed by GPB may enter into cross collateralization or cross guarantee arrangements with other Portfolio Companies or portfolio companies of other Companies managed by GPB. While we would expect any such financing arrangements to generally be non-recourse to the Company or the other companies managed by GPB, any such cross collateralization or cross guarantees could result in (i) the Company losing its interest in otherwise performing investments due to poorly performing or non-performing investments of other companies managed by GPB and/or (ii) any Portfolio Company or portfolio company of another company managed by GPB being liable for more than their pro rata share of a particular obligation and therefore being required to contribute amounts in excess of their pro rata share, including additional capital to make up for any shortfall if the relevant other vehicles are unable to repay their pro rata share of such indebtedness or other obligation.

Affiliation with Ascendant. Offers and sales of the interests in the Companies will be sourced primarily through Ascendant, an affiliate of GPB. Ascendant is registered with the SEC as a broker-dealer and is a member of Financial Industry Regulatory Authority (“FINRA”), and is authorized to engage in the following securities and investment banking activities: (i) offering the private placement of securities; (ii) selling limited partnerships in primary distributions; and (iii) acting as a wholesaling broker-dealer, selling interests in various types of direct investment products, including, without limitation, private real estate investment programs and operating businesses. Ascendant may, in the future, seek the approval of the SEC and/or FINRA to engage in additional securities and investment banking activities, and engage in such activities as permitted by the SEC and/or FINRA.


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The relationship between GPB and Ascendant gives rise to conflicts of interest between GPB and the Company, as Ascendant’s interests and/or the interests of its clients may conflict with the interests of the Companies and their Investors. GPB presently anticipates the Companies paying acquisition fees, performance allocations, selling fees, and operations expenses to Ascendant and/or its owners, officers, directors, or employees. Such fees and expenses may be substantial, and are in addition to the managerial assistance fees or any other fees payable by the Companies to GPB. The Companies have no right to share in any compensation received by Ascendant. As Ascendant is an affiliate of GPB, such compensation may not in each case be negotiated at arm’s length and from time to time may be in excess of fees, commissions or other compensation that may be charged by an unaffiliated third party.

Nothing in the Companies’ Offering Documents precludes or in any way limits the activities of Ascendant, including its ability to buy or sell interests in, or providing financing to, portfolio companies of the Companies or competitors of Portfolio Companies, for the Companies account or for the account of others. For example, Ascendant may from time to time perform services for clients who may have interests that conflict with those of Portfolio Companies or the Companies. Ascendant’s activities are carried out generally without reference to securities held directly or indirectly by the Companies, even though such activities may have an effect on the value of the securities so held.

Ascendant may from time to time also act as placement agent in respect of investment funds or companies that are sponsored and managed by third party investment managers, including funds or companies that may compete with the Companies. In providing such services to, or with respect to, a competitor fund or company, Ascendant may not take into consideration all of the interests of the Companies.

In addition, Ascendant may from time to time collect fees from a company in which the Companies have an interest, and such fees will not benefit Investors in such Company. GPB has an incentive to seek to influence the decision by a portfolio company’s management to retain Ascendant, or to otherwise transact with Ascendant, instead of other unaffiliated broker-dealers or other service providers or counterparties that may be more appropriate or offer better terms. GPB may also have an incentive to structure certain transactions, including co-investment opportunities, so that they require the use of a broker-dealer.

Conflicts Related to Purchases and Sales. Conflicts may arise when a Company makes investments in conjunction with an investment being made by other Companies or in a transaction where another Companyhas already made an investment. Investment opportunities are, from time to time, appropriate for Companies at the same, different or overlapping levels of a portfolio company’s capital structure. Conflicts arise in determining the terms of investments, particularly where these clients may invest in different types of securities in a single portfolio company. Questions arise as to whether payment obligations and covenants should be enforced, modified or waived, or whether debt should be refinanced. Decisions about what action should be taken in a troubled situation, including whether or not to enforce claims, whether or not to advocate or initiate a restructuring or liquidation inside or outside of bankruptcy, and the terms of any work-out or restructuring will raise conflicts of interest, particularly in Funds that have invested in different securities within the same portfolio company. Certain clients of GPB and its affiliates may invest in debt and securities of companies in which other clients hold securities, including equity securities. In the event that such investments are made by a Company, the interests of such Company will at times conflict with the interest of such other Company, particularly in circumstances where the underlying company is facing financial distress. The involvement of such persons at both the equity and debt levels could inhibit strategic information exchanges among fellow creditors. In certain circumstances, Companies will be prohibited from exercising voting or other rights, and may be subject to claims by other creditors with respect to the subordination of their interest. If additional capital is necessary as a result of financial or other difficulties, or to finance growth or other opportunities, the Companies may or may not provide such additional capital, and if provided each Company will supply such additional capital in such amounts, if


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any, as determined by GPB. In addition, a conflict will arise in allocating an investment opportunity if the potential investment target could be acquired by either a Company or a portfolio company of another Company. Investments by more than one client of GPB in a portfolio company will also raise the risk of using assets of a client of GPB to support positions taken by other clients of GPB. Employees and related persons of GPB and its affiliates have made or may make capital investments in or alongside certain Companies, and therefore often have additional conflicting interests in connection with these investments. There can be no assurance that the return of a Company participating in a transaction would be equal to and not less than another Company participating in the same transaction or that it would have been as favorable as it would have been had such conflict not existed.

A Company may, from time to time invest in opportunities that other Companies have declined, and likewise, a Company may, from time to time decline to invest in opportunities in which other Companies have invested. A conflict of interest arises because one Company will, in such circumstances, benefit from the initial evaluation, investigation and due diligence undertaken by GPB on behalf of the original Company considering the investment. In such circumstances, the benefitting Company or Companies will not be required to reimburse the original Company for expenses incurred in connection with researching such investment.

Principal Transactions. Section 206 under the Advisers Act regulates principal transactions among an investment adviser and its affiliates, on the one hand, and the clients thereof, on the other hand. Very generally, if an investment adviser or an affiliate thereof proposes to purchase a security from, or sell a security to, a client (what is commonly referred to as a “principal transaction”), the adviser must make certain disclosures to the client of the terms of the proposed transaction and obtain the client’s consent to the transaction. In connection with GPB’s management of the Companies, GPB and its affiliates may engage in principal transactions. GPB has established certain policies and procedures to comply with the requirements of the Advisers Act as they relate to principal transactions, including that disclosures required by Section 206 of the Advisers Act be made to the applicable Companies regarding any proposed principal transactions and that any required prior consent to the transaction be received. In addition, the Offering Documents of the Companies generally contain additional restrictions on the ability of the Companies or GPB to engage in principal transactions.

Group Purchasing. A Company’s Portfolio Companies may be counterparties or participants in agreements, transactions or other arrangements with portfolio companies of other Companies managed by GPB or its affiliates that, although GPB determines to be consistent with the requirements of such Companies’ Offering Documents, may not have otherwise been entered into but for the affiliation with GPB, and which may involve fees and/or servicing payments to affiliates of GPB. For example, GPB has in the past and may in the future cause Portfolio Companies to enter into agreements regarding group procurement (which may depend on the volume of services purchased under these agreements and which may be pooled across multiple portfolio companies and discounted due to scale), benefits management, data management and/or mining, technology development, purchase or title and/or other insurance policy (which may be pooled across multiple portfolio companies and discounted to scale) and other similar operational initiatives that may result in fees, better pricing, rebates, commissions or similar payments and/or discounts being paid to GPB, its affiliates or a Portfolio Company, including related to a portion of the savings achieved by the Portfolio Company. While GPB may have a conflict of interest because its economic benefit may incentivize GPB to maintain such arrangements, GPB believes that such agreements benefit the Portfolio Companies due to increased access to quality products and services at beneficial pricing and GPB’s benefits from such arrangements are reduced because GPB only benefits on at the same rate as the Portfolio Companies. However, it should not be assumed that a Company related to, or otherwise affiliated with GPB will only take actions that are beneficial to, or not opposed to, the interests of a Company and its Portfolio Companies.


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U.S. Tax Risks

General. The Companies generally expect to be treated as partnerships for U.S. federal income tax purposes. Each Investor, in determining its U.S. federal income tax liability, will take into account its allocable share of the Company’s income, gain, loss, deduction and credits, without regard to whether it has received distributions from the Company. Potential Investors are urged to review the relevant Company’s Offering Documents. The tax consequences to Investors are complex. Accordingly, each prospective Investor is advised to consult its own tax counsel as to the specific tax consequences of an investment in a Company.

Unrelated Business Taxable Income. The Companies anticipate that they may incur income that would be treated as unrelated business taxable income under Code §512 (“UBTI”). Accordingly, prospective Investors that are tax exempt entities, including qualified retirement plans (stock, bonus, pension, or profit sharing plans described in the Internal Revenue Code of 1986 §401(a)) and individual retirement accounts (“IRAs”), are urged to consult their tax advisors concerning the U.S. Federal, state and local income and other tax consequences that may result from an investment in the Companies.

The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Companies. Prospective Investors should read the relevant Company’s Offering Documents and consult with their own advisers before deciding whether to invest in the Companies. In addition, as each Company’s investment program develops and changes over time, an investment in a Company may be subject to additional and different risk factors.

Item 9: Disciplinary Information

To date, there have been no legal or disciplinary events in which GPB or any of its supervised persons have been involved that are material to an Investor’s or a prospective Investor’s evaluation of GPB’s business or management.

Item 10: Other Financial Industry Activities and Affiliations

GPB personnel provide services to the Companies and to the Portfolio Companies. The Related Parties are also not precluded from conducting activities unrelated to the Companies. GPB employees, officers and directors may, and expect to, receive fees or other compensation from third parties in connection with acquisition activities and such fees and compensation shall be for the benefit of their own account and not for the Companies. GPB believes that these other activities will not materially interfere with its and the Related Parties responsibilities to the Companies.

GPB will generally select service providers by collecting multiple bids for services and using reasonable diligence by taking into account factors such as expertise, availability and quality of service and the competitiveness of compensation rates in comparison with other service providers satisfying GPB’s service provider selection criteria. GPB will generally determine the compensation of such providers without review by or consent of the Investors, an advisory committee or other independent parties. The Companies, regardless of their relationship to the person performing the services, will bear the fees, costs and expenses related to such services. This could create a conflict of interest for the Companies. In certain circumstances, advisors and service providers, or their affiliates, may charge different rates or have different arrangements for services provided to GPB or its affiliates as compared to services provided to the Companies and Portfolio Companies, which may result in more favorable rates or arrangements than those payable by a Company or such Portfolio Company. Mr. Gentile is a member of the board of directors of Alphaserve Technologies, an IT services company. To the extent Alphaserve Technologies perform


24

services to the Companies and GPB, such services shall be rendered to the Companies on terms that are equal to or better than those that apply for GPB. Similarly, Mr. Gentile served as a member of Gentile Pismeny & Brengel LLP (“GP&B”) until December 31, 2014 and continues to receive a fixed payment for the next several years pursuant to a buy-out agreement between Mr. Gentile and GP&B. From time to time, GP&B may provide certain accounting and related services to GPB, certain Portfolio Companies, and the Companies pursuant to arms-length terms. However, this potential conflict of interest is mitigated and controlled (1) due to the fixed, limited and reasonable nature of Mr. Gentile’s payments and (2) because Mr. Gentile is no longer a member and is no longer involved in the day-to-day affairs of GP&B. In addition, certain employees of GP&B may share office space with certain employees of GPB and as such will be subject to certain policies and procedures of GPB.

Ascendant, an affiliate of GPB, is registered as a broker-dealer with the SEC and is a member of FINRA. Ascendant is also registered as a broker-dealer in several states. Ascendant served as placement agent with respect to the offering of interests in the Companies, and may in the future serve as placement agent for the offering of interests in other Companies that may be organized in the future to be managed by GPB.See Section 8 above for a discussion of the conflicts of interest involved in Ascendant’s affiliation with GPB.

Certain of GPB’s management persons or employees of GPB’s affiliates are or may become registered representatives and/or principals of Ascendant and, when such person(s) engages in securities-related transactional activities, will be subject to Ascendant’s policies and procedures in addition to GPB’spolicies and procedures.

Item 11: Code of Ethics, Participation or Interest in Client Transactions, and Personal Trading

A. Code of Ethics

GPB has adopted a Code of Ethics (the “Code”). Among other things, the Code includes written procedures governing the conduct of GPB’s supervised persons. The Code also imposes certain reporting obligations on persons subject to the Code. The Code and applicable securities transactions are monitored by GPB’s Chief Compliance Officer. GPB will send clients or Investors a copy of its Code upon written request. To receive a copy of the Code, please contact Jeffrey Schultz at (212) 235-2658 or [email protected].

GPB has policies and procedures in place to ensure that the interests of the Companies are given preference over those of GPB, its affiliates, and its employees. For example, there are policies in place to prevent the misappropriation of material nonpublic information, and such other policies and procedures reasonably designed to comply with federal securities laws.

B. Investment Recommendations Involving a Material Financial Interest

See Items 8 and 10 above.

C. Purchase of Same Securities Recommended to Clients

Unless otherwise restricted by a Company’s Offering Documents, GPB, its affiliates, employees and their families, trusts, estates, charitable organizations, and retirement plans established by it are typically not prohibited from purchasing or having any direct or indirect interest in the same assets as are purchased for Companies provided such purchase or interest is in accordance with the Code. The personal asset or securities transactions by advisory representatives and employees may raise potential conflicts of interest when they acquire an interest in a portfolio company that is:


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Owned by the Company, orConsidered for purchase or sale for the Company.

GPB has adopted the following policies and procedures that are intended to address these conflicts of interest:

Require GPB’s advisory representatives and employees to act in the client’s best interest.Require GPB’s advisory representatives to disclose any direct or indirect interest in aPortfolio Company considered for purchase in one or more affiliate Companies.Require GPB’s advisory representatives and employees to follow GPB’s procedures.

Item 12: Brokerage Practices

The Companies rarely acquire securities for which execution services need be provided by a broker-dealer. In the event that a Company acquires such securities, GPB would select the broker-dealer consistent with its duty to achieve best execution for the Companies. Broker-dealers, to the extent required for any of the Companies’ transactions, will be selected on a case by case basis relying on a number of factors. Such factors may include reputation, client relationships, net price, financial strength and stability, efficiency of execution and error resolution.

While it is not part of their primary business to engage in the purchase or sale of publicly traded securities, GPB and its affiliates may aggregate (or bunch) the orders of more than one Company for the purchase or sale of the same publicly traded security. Portfolio managers and traders often employ this practice because larger transactions may enable them to obtain better overall prices, including lower commission costs or mark-ups or mark-downs. GPB and its affiliates may combine orders on behalf of the Companies with orders for other Companies for which it or its affiliates have trading authority, or in which it or its affiliates have an economic interest. In such cases, GPB and its affiliates generally aggregates trade orders for publicly traded securities so that each participating Company will receive the average price for each execution of a transaction.

If an order for more than one Company for a publicly traded security cannot be fully executed, allocation shall be made based upon GPB’s procedures for allocation of investment opportunities.

Currently, GPB has no formal soft dollar arrangements in place. To the extent GPB enters into any soft dollar arrangements in which it will receive research or brokerage services from a broker-dealer and/or third party, GPB will limit the use of “soft dollars” to obtain services that constitute research and brokerage within the meaning of Section 28(e) of the Securities Exchange Act of 1934.

Item 13: Review of Accounts

GPB personnel and the Acquisition Committee manage and monitor the Companies’ accounts. Mr. Gentile and the Acquisition Committee members are also responsible for ensuring that any significant change in a Company’s strategy or in the concentration of a Company’s assets is appropriate for the Company.

In addition to the on-going monitoring of each Company’s respective portfolio, GPB may perform periodic reviews of each Company’s respective portfolio to determine, among other things, if there have been material changes in a Company’s objectives or a material change in how GPB formulates its acquisitions and operational advice.

Each Company will deliver to each Investor, as soon as practicable (generally within 120 days) following the end of each fiscal year, beginning in 2016 (i) financial statements for such fiscal year prepared on a


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GAAP basis and audited by a Public Company Accounting Oversight Board-registered firm, and (ii) all necessary tax reporting information to satisfy reporting obligations under the Internal Revenue Code of 1986, with respect to any acquisitions the Companies make in any entities organized or formed in jurisdictions outside the United States. Within 45 days after the end of each fiscal quarter, GPB will use its best efforts to deliver to each Investor an unaudited summary investment report for such quarter.

Item 14: Client Referrals and Other Compensation

For details regarding economic benefits provided to GPB by persons other than the Companies, including a description of related material conflicts of interest, please see Items 8 and 10 above. In addition, GPB and its related persons will, in certain instances, receive discounts on products and services provided by Portfolio Companies of Companies and/or the customers or suppliers of such Portfolio Companies, subject to the Code’s pre-clearance and/or reporting requirements.

Although GPB does not currently have any soft dollar arrangements in place, GPB may receive certain research or other services from broker-dealers, which can be considered an economic benefit. Receiving the aforementioned research and other services may create an incentive for GPB to select or recommend broker-dealers based on GPB’s interest in receiving the research or other products or services and may result in the selection of a broker-dealer on the basis of considerations that are not limited to the lowest commission rates and may result in higher transaction costs than would otherwise be obtainable by GPB on behalf of the Companies.

Item 15: Custody

Item 15 is not applicable to GPB, as a qualified custodian is not required to send quarterly, or more frequent, account statements directly to the Companies.

Item 16: Investment Discretion

GPB, either individually or through its affiliates, generally acts as general partner for the Companies. As such, it will normally have full discretionary authority to act on behalf of the Companies in all aspects, subject to the Company’s objectives, restrictions and guidelines in its Offering Documents. This authority is established through the subscription documents completed and signed by each Investor prior to its investment in a Company.

Companies generally have very limited restrictions on the types or number of acquisition and operation strategies they may pursue or the kind or range of products in which they may invest. Investors should review the Offering Documents of each Company to understand the breadth of investments a Company may hold and extent of the Company’s ability to hold assets which may not have been specifically identified in the Offering Documents.

Item 17: Voting Client Securities

Unless provided otherwise in an Offering Documents, GPB will have voting power with respect to a Company’s securities, but is it unlikely that a Company would hold any security for which proxies would be solicited. If the situation arises, GPB will monitor for potential conflicts of interest between the Companies’ interests and its own within the proxy voting process. In keeping with its fiduciary duties, GPB, as general partner of the Companies has adopted a Proxy Voting Policy, which sets forth policies and procedures designed to ensure that GPB would vote any client's securities in the best interests of each client. When making proxy voting decisions, GPB may seek advice or assistance from third-party consultants, such as proxy voting services or legal counsel.


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Investors may contact Jeffrey Schultz at (212) 235-2658 or [email protected] to find out how GPB has voted any proxies or to obtain a copy of GPB’s Proxy Voting Policy.

Item 18: Financial Information

GPB is not required to provide a balance sheet in response to this Item 18 since it does not require nor solicit prepayment of fees six months or more in advance.

GPB is not aware of any financial condition that is likely to impair its ability to meet its contractual commitments to its clients.

GPB has never been the subject of a bankruptcy petition.


Item 1. Cover Page

GPB CAPITAL HOLDINGS, LLC

535 West 24th Street, 4th Floor New York, NY 10011

Tel: (212) 232-2650 HTTP://WWW.GPB-CAP.COM

Part 2B of Form ADV (The “Brochure Supplement”)

David GentileMarch 30, 2017

This Brochure Supplement provides information about certain supervised persons of GPB Capital Holdings, LLC (“GPB”), that supplements GPB’s Form ADV Part 2A (the “Brochure”). Youshould have received a copy of the Brochure. To receive a current copy of the Brochure or if youhave any questions about the contents of this Brochure Supplement, please contact Jeffrey Schultz at (212) 235-2650 or [email protected].

Additional information about GPB is also available on the United States Securities and Exchange Commission’s (the “SEC”) website at www.adviserinfo.sec.gov.


Brochure Supplement David Gentile

Item 2: Educational Background and Business Experience

Mr. Gentile was born in 1966. He joined GPB in March 2013 and serves as its Managing Member.

Mr. Gentile spent over 25 years at the Accounting and Corporate Advisory practice of Gentile, Pismeny & Brengel in New York before joining GPB.

Mr. Gentile graduated with a Bachelor of Arts Degree from Queens College and is a CPA.

Item 3: Disciplinary Information

There is no disciplinary history to report.

Item 4: Other Business Activities

Mr. Gentile serves as a member or president of various special purpose vehicles or business entities formed over the years to facilitate certain investments or business activities. Mr. Gentile was a member of Gentile Pismeny & Brengel LLP (“GP&B”) until December 31, 2014 and continues to receive a fixed payment for the next several years pursuant to a buy-out agreement between Mr. Gentile and GP&B. From time to time, GP&B may provide certain accounting and related services to GPB, GPB’s clients, and portfolio companies of GPB clients pursuant to arms-length terms. However, this potential conflict of interest is mitigated and controlled (1) due to the fixed, limited and reasonable nature of Mr. Gentile’s payments and (2) because Mr. Gentile is no longer a member and is no longer involved in the day-to-day affairs of GP&B.

While the aforementioned outside business activities may collectively provide greater than 10% of Mr. Gentile’s income, they do not involve a substantial amount of his time. Furthermore, no single outside business activity provides a substantial source of his income nor involves a substantial amount of his time. As such, GPB does not believe Mr. Gentile’s relationships with the aforementioned entities create a conflict of interest with GPB’s clients.

In addition, Mr. Gentile passively owns an indirect 33% interest in Ascendant Alternative Strategies, LLC (together with Ascendant Capital, LLC, a branch office of Ascendant Alternative Strategies, “Ascendant”). Ascendant is registered with the SEC as a broker-dealer and is a member of FINRA. Ascendant served as placement agent with respect to the offering of interests in the various limited partnerships which are generally either exempt investment companies or holding companies for which GPB serves as general partner and/or investment manager (collectively, the “Companies”), and may in the future serve as placement agent for the offering of interests in other Companies that may be organized in the future to be managed by GPB.

The relationship between GPB and Ascendant gives rise to conflicts of interest between GPB and the Companies, as Ascendant’s interests and/or the interests of its clients may conflict with the interests of the Companies and their investors. GPB presently anticipates the Companies paying


acquisition fees, performance allocations, selling fees, and operations expenses to Ascendant and/or its owners, officers, directors, or employees. Such fees and expenses may be substantial, and are in addition to the managerial assistance fees or any other fees payable by the Companies to GPB. The Companies have no right to share in any compensation received by Ascendant. As Ascendant is an affiliate of GPB, such compensation may not in each case be negotiated at arm’s length and from time to time may be in excess of fees, commissions or other compensation that may be charged by an unaffiliated third party.

Ascendant may from time to time also act as placement agent in respect of investment funds or companies that are sponsored and managed by third party investment managers, including funds or companies that may compete with the Companies. In providing such services to, or with respect to, a competitor fund or company, Ascendant may not take into consideration all of the interests of the Companies.

In addition, Ascendant may from time to time collect fees from a company in which the Companies have an interest, and such fees will not benefit investors in such Company. GPB has an incentive to seek to influence the decision by a portfolio company’s management to retain Ascendant, or to otherwise transact with Ascendant, instead of other unaffiliated broker-dealers or other service providers or counterparties that may be more appropriate or offer better terms. GPB may also have an incentive to structure certain transactions, including co-investment opportunities, so that they require the use of a broker-dealer.

Mr. Gentile will be subject to Ascendant’s policies and procedures in addition to GPB’s policies and procedures.

Item 5: Additional Compensation

Other than as disclosed in Item 4, Mr. Gentile does not receive any additional compensation.

Item 6: Supervision

Mr. Gentile is the Managing Member of GPB and the investment advice that he provides is not subject to supervision. Certain clients managed by GPB have an investment committee. Investment advice provided for GPB’s clients is generally reviewed by each client’s investment committee prior to implementation. Mr. Gentile also serves as an investment committee member for GPB’s clients. The activities of all supervised persons, including Mr. Gentile, are subject to GPB’s compliance policies and procedures which are administered by Jeffrey Schultz, the Chief Compliance Officer of GPB. Mr. Schultz’s telephone number is (212) 235-2650.



$1,500,000,000



January 2018 ________________________________________________________

EXHIBIT C

SUBSCRIPTION DOCUMENTS



$1,500,000,000



January 2018 ________________________________________________________

EXHIBIT D

DISCLOSURE UNDER RULE 506(E) OF REGULATION D



$1,500,000,000



January 2018 ________________________________________________________

EXHIBIT E

LIST OF PORTFOLIO COMPANIES
